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THE 






- 

New Republic 



H. J. PARKER, H. D., LL. D. 



1 l>e lN ^w Republic 



-BY- 



H. J. PARKER, M. D., LL. D. 

The same being Part First of a work by the 
author in three parts entitled 

"THE AUTOMATIC CIVILIZATION" 

F R 6 : 

"The end of Polities is the good of man." — Aristotle 



COPYRIGHTED 1894 BY THE AUTHOR. 
AU, RIGHTS RESERVED. 



PUBLISHED BY THE AUTHOR: 
CDAYTON, 11,1,. 



V 






PREJFACK. 

During the past decade there has been a vast 
number of books, and almost a surfeit of general 
literature, treating of the various subjects con- 
nected with political economy and suggesting 
various changes and reforms in our political sys- 
tem — changes that might tend to correct abuses 
and prevent a drift of our government and insti- 
tutions away from the solid moorings upon which 
it was planted by our forefathers; and, believing 
that I may have something that will interest the 
curious and perhaps instruct the less learned in 
politic- , I offer for the consideration of my coun- 
trymen the New Republic. 

I hope the title I have chosen will not suggest 
the thought that I herein advocate revolutionary 
measures, for I know too well the conservative 
disposition of the American people to expect them 
to be interested in theories that call for the adop- 
tion of totally new experiments in legislation. 
Evolution, rather, must be the oider of progress, 
especially when the political system is well 
grounded in correct principles, as I take it to be 
the case in the United States. I have likewise 



4 PREFACE. 

shunned all Hair-breadth distinctions and ignored 
the discussion of abstruse and secondary subjects, 
such as wages and wage fund, capital and wealth, 
rent and interest; and for the reason that I be- 
lieve, that, to dwell on these, is simply to mystify 
incidentals, while my aim is to simplify funda- 
mental questions of government. 

The fundamental processes of civilization are 
conceded to be the production and distribution of 
wealth, and however much I may differ from other 
authors, it seems quite clear to me that money, 
commerce and the inventive genius as manifested 
in mechanics are the great instrumentalities of 
these fundamental processes, or the economic 
forces, the adjustment of which determines all 
the minor, incidental or secondary elements, and 
that when the fundamentals are scientifically ad- 
justed, the secondary ones will move automat- 
ically, when resting on a solid foundation. 

I believe that the function of government, the 
object of practical statesmanship under democratic 
forms, should be to look to the adjustment of 
fundamentals and no further, (or little further,) 

I have therefore dealt mainly with subjects 
that, as I view it, come properly under the prov- 
ince of legislative supervision, and ask the reader 
to follow me closely through the chain of thought 
presented, however poorly connected that chain 
may be. 



PREFACE. 5 

i. The criticism on the land theory of Henry 
George is not as full as I would like to make it, 
on account of not wishing to burden the reader, 
and, in offering it, I realize the greatness of my 
foe and appreciate his efforts towards arousing 
thought on great problems. 

2. My reasonings on money are not altogether 
new, but I think I have carried them a little 
"nearer home than current authors; and, while 
commerce is touched upon but briefly, my aim, 
in that connection, has been, more to show the 
correlation of economic subjects or forces, than to 
enter into a general discussion. 

3. The incidental and collateral questions of 
taxation and labor have been treated of to that ex- 
tent deemed proper in a work of this kind. 

4. On the law of population, while my observa- 
tions may excite the curiosity of some and shock 
the modesty of others, I believe them to be based 
on sound principles of science and morals. 

H.J. Parker. 
Clayton, Illinois, 1894. 



Tl)e iSew Republic, 



CHAPTER I. 



INTRODUCTION. 

"Mankind are more inclined to suffer evils, so 
long as sufferable, than to right them by abolish- 
ing the forms to which they are accustomed." — 
Declaration of Independence. 

Notwithstanding we live in a great age of prog- 
ress and invention and that our government is 
one of the best among the civilized nations of the 
world, it is generally admitted that the condition 
of the masses of our people, as to prosperity, is 
not what it ought to be, nor what it might be 
with the right effort on the part of those who con- 
duct our governmental affairs. We may readily 
note the contrast between the effusions of our 
Fourth of July optimists, who picture prosperity 
and happiness everywhere, and those of the aver- 
age political innovator (or we may say demagogue) 
who sees ruin and revolution staring us in the 
face from every quarter; and, on striking an aver- 
age between relative economic conditions of our 



THE NEW REPUBLIC. 7 

people, we get results not altogether satisfactory 
to our ideas of justice. 

The conditions to be deplored and that attract, 
and force themselves on, our attention are found 
to be the outgrowth of inequitable distribution of 
wealth — a condition of great wealth concentration 
on the one hand and that of poverty on the other 
— such as doubtless suggested, to the mind of a 
great writer, the title of the work, "Progress and 
Poverty." 

The citizen, who puts a proper estimate 
on the mental qualities of the American peo- 
ple and who has reflected on the nature of, and 
the laws governing, political progress, will never 
fear but that these conditions will be righted 
sooner or later and in one way or another; but 
every one should, at the same time, feel that he 
ought to take part in solving the problems call- 
ing for solution and assist in the establishment 
of the proper conditions, and with this end in 
view, this volume is offered to my countrymen. 

Lethargy and inattention are natural out- 
growths of prosperity, and the mental character- 
istic inherent in the human species and so cor- 
rectly set forth in the quotation previously given 
from the Declaration of Independence, may well 
be borne in mind. For, the encroachments of 
oppression, being always insidious, and the domi- 
nation of wealth and power so unrelenting, the 



8 THE NEW PEPUBLIC. 

further we might get in the wrong direction, the 
more difficult we will find it to move toward the 
other tangent. 

The great question that has always been the 
subject of dispute in governments, and in our 
government especially, is to whether a govern- 
ment for the many is preferable to one for the few, 
and, though it has long been decided in theory 
and in the exercise of the franchise, it is not al- 
ways reflected just what altogether constitutes 
and determines the kind of government existing, 
or when we might have the form and not the 
substance. 

I shall, in this work, try to point out the prin- 
ciples on which our government is based and the 
economic forces that determine its drift in the one 
direction or the other. When we find the causes 
that, clearly to our minds, are drifting our gov- 
ernment in the wrong direction, should we so 
find them, or, when we, on the other hand, find 
means of moving in the right direction, or further 
in the right direction, they will of course be re- 
moved in the first instance and adopted in the 
latter, and my province is only to help clear the 
way. 

There are many elements in this country clam- 
oring for legislation in one way or another, and I 
suppose it is because, in the first place, everybody 
claims and possesses the right to clamor; and, in 



THE NEW REPUBLIC. 9 

the second place, because many feel that they 
have grievances. That many will ask and not 
receive directly goes without saying, and for the 
reason that every grievance is not properly the 
subject of legislation; yet it is admitted on all 
hands that a correct differentiation is, and will 
be, one of the most delicate problems of states- 
manship, and this in part because of the political 
relations between the legislator and the elector. 
As I view it, those elements that pertain to, or 
affect, all the people or a great number of citizens 
are more properly the subjects of legislative reg- 
ulation than those that affect but few or fewer, so 
that, we may say, it is generals more than partic. 
ulars that require the attention of writers and 
legislators. 

And I may say it is the middle grounds that 
should be taken, and, though I may be accused 
of partiality, it seems to me that the interests of 
the mediocrity should be more particularly looked 
after; for, the class of citizens that have ap- 
proached too far towards aristocracy or plutocracy 
require to be curbed rather than assisted, while 
the lower strata must draw their subsistance and 
their comparative prosperity from the prosperous 
condition of the middle classes, rather than ex- 
pect legislative assistance directly. Hence it is, 
from the nature of the case, that the mediocrity is 
the objective point on which the legislative focus 
must be turned. 



10 THE NEW REPUBLIC. 

It is here that many writers are grounded. 
They seem to center their mental force at the 
wrong point and, by so doing, fall into errors. It 
may be observed that the author of "Progress and 
Poverty," for instance, looks always to the lower 
strata and expects to lift from the bottom alto- 
gether, rather than from the middle, as I would 
do, in order to both push and pull, or rather, in 
politics, to pull both up and down, so as to estab- 
lish an equilibrium. Mr. George, as I think I 
shall make appear, aims to lift from the bottom, 
and his theory tends to crush the mediocrity be- 
tween the lower and the upper strata, since he 
does not remove the upper. This difference in 
ihe course arrived at by different writers, I desire 
the reader to carefully consider. 

Another mistaken position taken by political 
economists and writers and agitators generally, is 
that their innovations are characterized by radi- 
calism, indefiniteness and prolixity. Their rem- 
edies are extreme; they are not definitely proven, 
and they are consequently tedious and difficult of 
comprehension, from all of which causes they are 
less quickly endorsed and less earnestly followed. 

Take, for instance, first, what is called philo- 
sophical anarchism, or the abolition of govern- 
ment. These writers, by advocating no govern- 
ment and consequently no public offices (or few), 
would eliminate from our civilization one of the 



THE NEW REPUBLIC. II 

greatest forces and incentives of patriotism, that 
of public life and honorable ambition, without 
which it would be difficult to conjecture where we 
would go to. Aristotle, in his far-reaching analy- 
sis, lays down three modes of life : (i) that of 
sensual and pleasurable enjoyment, (2) public life, 
and (3) the life of contemplation, the proper rela- 
tive play of all of which constitutes the state of 
happinesss, and, when we remove one of these, 
we would necessarily become a totally different 
race of beings. Hence it is that this pretended 
high ideal of philosophical anarchism is entirely 
too extreme and radical, and its advocacy only 
tends to prevent the consideration of more prac- 
tical measures, to say nothing of its other features. 

The same may be said exactly of Mr. George's 
system of taxation and land in common. Its 
adoption would necessitate a different civilization 
and is too extreme to meet with general approval, 
not to mention its objectionable features, which I 
think will be made clear in this work. ' 

The position of Socialism is somewhat similar. 
The term means simply a broader democracy, or 
republicanism, but by carrying its claims too far, 
its more practical features are rejected. The 
postoffice department of our government is a so- 
cial institution, and it may be reasonably and suc- 
cessfully contended that those branches of busi- 
ness that affect all the people, such as the money 



12 THE NEW REPUBLIC. 

system of the country and the railroads, should 
be placed on the social basis. Likewise of some 
other branches. But, when we talk of going to 
the extreme of legislating on the wages and hours 
of labor of the farm hand, or on local manufactur- 
ing establishments and isolated industry general- 
ly, we are going too far toward paternalism and 
find ourselves in collision with the true American 
idea of liberty. My aim in this work is to con- 
fine my theory of reform to the proper sphere and 
to those general principles and branches that may 
be seen to come within the range of practical leg- 
islation from the American standpoint of viewing 
things. 

In much of the literature that has been afloat 
of late on subjects of political economy, I think it 
may be said that it is the result of but partial and 
incomplete study and investigation, so that clear 
cut and definite results can not be seen, as prob- 
ably to follow the adoption of what has been con- 
tended for. This is particularly true of the mass 
of writings on the subject of money, and my aim 
is to make clear some of the problems here in- 
volved, by formulating a complete system of 
money, rather than simply to show the imperfec- 
tions of present systems. 

The advocacy of extreme measures or revolu- 
tionary theories and the imperfect systemetizing 
of reform measures necessarily results in a pro- 



THE NEW REPUBLIC. 1 3 

lixity of argumentation that is ruinously confus- 
ing to the masses, and I often think that writers 
become sophists unconsciously. If it were said of 
some authors that they were employed to write 
for the purpose of confounding political questions, 
and we would then read their works from this 
hypothesis, it would appear quite clear whence 
they drew their inspiration, viz. : from that class 
of persons that aim to mystify political questions 
in order to impose upon their fellows. The sub- 
jects they discuss, such as the laws of wages, cap- 
ital, rent, interest, etc., are fit enough to occupy 
the contemplative mind, but are of no special in- 
terest at one period of time, nor in any particular 
country, more than another; nor have they any 
special application to present necessary legisla- 
tion, or at least not such a relation to the funda- 
mental questions of political economy as renders 
their dilucidation profitable and urgent. 

I am writing on practical, present, home ques- 
tions and aiming to clear up in the mind of the 
reader what I consider urgent necessary legisla- 
tion, that we may move forward in a grand politi- 
cal reform. 



CHAPTER II. 



BASIS OF GOVERNMENT — FORCES OF SOCIETY— LEG- 
ISLATIVE BASIS — SPIRIT OF PROPERTY — CEN- 
TRALIZATION VS. PATERNALISM. 

"We only wish to be free, and liberty is but 
justice" — Volney. 

Aristotle says, that "every art and every sys- 
tem, likewise every action and every choice, aims, 
it is thought, at some good; for which reason a 
common discription of the chief good is, that 
which all things aim at;" and he concludes very 
correctly, that the most inclusive of all arts ' or 
systems is politics, because it includes all others. 

It therefore follows that politics, or the art of 
government, is that which should command oar 
most serious and thoughtful attention. It must 
also be admitted that political systems are ever 
undergoing slow but certain transitions, and that 
the substratum nature thereof is, in this day of 
thought, undergoing close examination. And, 
seeing that no government in the past has given 
altogether satisfacto^ results in fully satisfying 
the aspirations of humanity, there are some who 
go so far as to advocate its abolition. 



THE NEW REPUBLIC. 1 5 

We hear and read much nowadays about the 
government and the no-government theories com- 
paratively, and it is noticeable that those who 
take more to the anarchistic theory (less or no 
government) revert to the barbarous state with a 
feeling or sentiment something akin to a sympa- 
thetic approval, notwithstanding the elements and 
possibilities of progression toward happiness with 
which they are surrounded. They seem to look 
upon the present as a retrogression or degenera- 
tion from the past, rather than as a necessary 
transitory condition between the past lower and 
a future higher form of civilization. In fact many 
unschooled minds, and persons who are unfamil- 
iar with politics generally, partake of this tend- 
ency of thought. 

In keeping with this no-government theory, it 
may be observed that, in the past, no political 
system has been able to perpetuate itself, even 
when under the supposed guidance of supernatur- 
al dictation, as evidenced in the case of the Jews. 
It may be noted again that mankind must have 
succeeded in ascending the ladder of progress to 
a given point, and when in the weakest condition, 
without government regulations, and a question 
not the easiest to answer might be, what need we 
of a means of support when strong that we got 
along without when weak? This question is, to 
say the least, partially answered, however, in the 



1 6 THE NEW REPUBLIC. 

case of some peoples, in the overthrow of auto- 
cratic power and the establishment of republican 
governments. 

The distinction between a government where a 
class rule the remainder and one where the entire 
mass govern themselves, is, in a sense, the dis- 
tinction between government and no government; 
self-government being the absence of power from 
without, or of one part of the atoms over another 
part. Democracy and anarchy are therefore 
synonymous terms, and the advocates of the no- 
government theory, to be consistent, as it seems 
to me, can not, in a government by the people, 
demand more than a broader democracy or an im- 
provement on that they already have, which is en- 
tirely within their own power to htve. Evolu- 
tion should be the law governing the progress of 
society, not revolution, nor abolition. An exper- 
iment outside of this law would indeed be an ac- 
knowledgement of self-incompetency equal to sub- 
ordination to a superior. 

FORCES OF CIVILIZATION. 

The forces of civilization, or the forces of so- 
ciety in the process of evolving civilization, or 
what we may call the economic forces or pro- 
cesses, are, production distribution and consump- 
tion of wealth, the product of labor; and it is the 
relative play and adjustment of these forces that 



THE NEW REPUBLIC. 17 

produces this, that or the other resultant economic 
condition. 

In the. savage state these forces are limited in 
their development, and, as they develop mankind 
emerges from the primitive condition to the 
higher state. The savage produces little; there is 
little to distribute or to be accumulated, and little 
to be consumed or used and enjoyed; but as we 
advance, as cause or effect, these forces grow and 
assert their infinite diversification. 

Now we may call, as the active forces, produc- 
tion and distribution; while consumption is the 
passive force. Speaking more correctly, perhaps, 
production and distribution are the real forces, 
while consumption may be called an element. 
The prime factor behind the process of civiliza- 
tion is action, effort or labor aiming at the ac- 
complishment of results for the good of society, 
and, as self interest and preservation is the first 
law of nature, each atom of society seeks the en- 
joyment of the result of effort in just proportion 
or otherwise, as the case may be, and, while it is 
perhaps true that a part of the members of society 
.-. are more inclined , to be content with an unjustly 
small proportion of the results of a common effort, 
it is nevertheless true, as affirmed by Gibbon, 
that, "possession of the comforts of life by a few, 
which are denied to the remainder, is the source 
of all political agitations and revolutions." 



1 8 THE NEW REPUBLIC, 

Again, civilization being an art, government 
being an art, the instruments thereof are all in- 
ventions. The various means of progress are 
but so many inventions, the aim of all which is 
to lighten Ubor. Mankind are naturally inclined 
to procure the comforts of life with the least pos- 
sible exertion, and in this sentiment the genius 
of invention takes its root; and the greatest task 
or highest function of statesmanship is to give to 
each member of society an equitable proportion of 
the benefits growing out of invention. If all the 
atoms of society are making an equal effort, the 
benefit ought to be equal, and it is no substantial 
progress where one member of society reaps the 
benefit from the exertion of another. 

If the inventive genius tends to increase pro- 
duction in proportion to effort or labor, then la- 
bor should be proportionally lighten* d and com- 
forts resulting from exertion greater for all con- 
erned. 

Let us illustrate an inequitable distribu- 
tion: Previous to the emancipation of slavery, 
it made no difference to the slave whether labor- 
saving machinery was invented or no. In one 
case, as in the other, he worked twelve hours a 
day and procured only a subsistance. The mas- 
ter, owning all the elements of production appro- 
priated all the benefits of invention, so that, while 
we may say that civilization was advancing, it 



THE NEW REPUBLIC. 19 

was not the entire mass of society that was ad- 
vancing. The advance was toward the centripe- 
tal, or the centralization of wealth into the hands 
of a class, where such conditions existed. 

Chattle slavery is not the only condition under 
which the same result may follow. There are 
many ways to adjust the forces and elements of 
civilization so that the same results may follow, 
and the famous dispute between Hamilton and 
Jefferson was on this point, the former advocat- 
ing a government of, by and for a class; the lat- 
ter advocating a broad democracy and equal op- 
portunities to all. 

The great and all-absorbing question in polit- 
ical agitations, is, who gets the wealth and how 
much; who procures the blessings of society and 
at whose expense; who bears the burdens and 
who procures the exemptions from those burdens? 
We may talk of high-sounding moral ideas and 
humanitarian principles of love and let alone your 
neighbor, in order to smother the cry of the mud- 
sills and to content the mob, but all great ques- 
tions of society are the simple questions of bread 
and butter. 

Let me not be misunderstood. Of course, when 
we say that the discontent found to exist in so- 
ciety is the result of an unfair distribution of 
wealth and hence that the remedy is a more just 
division, it must not be inferred that no account 



20 THE NEW REPUBLIC. 

is to be taken of and no credit given for, superior 
capacity, care and industry. All these qualities 
should have all credit that can reasonably be 
claimed for them. But experience and observa- 
tion teaches that mankind are not inclined to 
complain of the results of their own folly, nor to 
claim what, in justice, does not belong to them. 
It is not natural and just, but the unnatural and 
the unjust, distribution of wealth that occasions 
the discontent resulting therefrom. 

LEGISLATIVE BASIS OF CIVILIZATION. 

Societies are formed by legislative enactments, 
and the nature of the laws determines the distri- 
bution of wealth. The burdens and exemptions, 
the privileges and immunities of society, are mat- 
ters of legislation, and hence the various and va- 
rying conditions, economically speaking, as well 
as otherwise, as found to exist among men, are 
purely and almost entirely creations of law. 

Laws may be so shapen that wealth will drift 
toward centralization or plutocracy, or they may 
be of that nature that the wealth current will be 
in the direction of a more democratic division. 
Now the designative charcteristic of democratic 
legislation is that its aim and purpose is to pro- 
tect the weak against the strong, the good against 
the bad, in a sense, the liberal against the greedy, 
and the ignorant against the cunning. That is, 



THE NEW REPUBLIC. 21 

speaking now economically. This is the essence 
of popular government and embraces the whole 
questions of liberty on the one hand and oppres- 
sion on the other. Or, to put the proposition in 
another form, legislation, to be right, must guar- 
antee to all members of society, so far as may be, 
"life, liberty and the pursuit of happiness." 

This manner of legislation may be illustrated 
in our interest, property exemption and bank- 
rupt laws, which are calculated to shield a more 
unfortunate class from the oppression of another 
class more fortunate, greedy or cunning. This 
kind of legislation may be termed legislation on 
capital and labor, or for the benefit of labor, upon 
which subjects some careless, superficial or inter- 
ested writers have affirmed that government has 
neither the right nor the power to remedially 
legislate. 

False political economists have looked upon 
government in somewhat the light presented by 
R. D. Goudy, in his "Hard Times and How to 
Cure them," as follows: "Hitherto so-called free 
governments have taken it for granted that their 
office was to maintain peace and order at home, 
and repel or prevent aggressions from without. 
Their chief aim has been to preserve a 'fair field 
and no favor,' so that all the separate atoms of 
the community might work out their own salva- 
tion or destruction with the least possible direc- 



22 THE NEW PEPUBLIC. 

rection or repression on the part of the central 
power; in short they act as the policeman and 
the soldier, bnt not as the guide, counselor and 
friend. If the different atoms or aggregations of 
atoms are successful in their aims and are con- 
tented and happy, it is well; if not they must just 
submit to the inevitable and be miserable, discon- 
tented and unhappy." While this seems to have 
been and is yet, in a degree, the guiding policy 
of too many who aspire to the name and honor of 
statesmen, it requires but little reflection to see 
its utter fallacy. 

R. G. Ingers©ll, in discussing the question of 
legislating on labor, endorsed this "free for all" 
theory, but, in an illustration given by him, dem- 
onstrated only too clearly the absurdity of his po- 
sition, as it seems to the writer. He said: u Put 
ten men on an island, each with ten thousand 
dollars, and in a short time one of them will have 
it all " Only too true. Remove from men the 
restraints of legislation, where they may get all 
they can and keep all they get, and it will not be 
long before the spirit of greed will accomplish 
the results so often boasted of as evidence of 
progress and prosperity, of one man appropriat- 
ing to himself, by means wise and otherwise, the 
fruits of the labor of his fellows. 

Government should not be instituted on the 
theory of the "survival of the fittest." We may 



THE NEW REPUBLIC. 2$ 

admit the correctness of this theory in the vege- 
table and animal kingdoms, and we have seen it 
hold sway in the primitive state of mankind and 
in societies presuming to a high state of civiliza- 
tion, but, when the human species put on the 
first apron, it stepped aside from this theory and 
government became more of an art than a science. 
Civilization is the taking advantage of and im- 
proving upon nature; and government, properly 
instituted, should not be guided by brute forces, 
but by protective and restrictive law. 

SPIRIT OF PROPERTY. 

In the varied discussions on the subject of 
wealth centralization and political economy in 
general, we hear much said on the side of wealth 
abont the ''spirit of property." It is claimed that 
anything tending in any way to check the profits 
of the capitalistic class operates against the genius 
of enterprise and tends to stagnation. But those 
who fear a lagging of enterprise among the weal- 
thy growing out of curtailment of profits, seem to 
fail to perceive that where a class is reduced be- 
low the possibility of encouragement in the direc- 
tion of acquiring a competency, the spirit of prop- 
erty is a dead element, so far as a part of the com- 
munity is concerned, and that the advocacy of 
legislation calculated to cause a more equitable 
distribution is nothing more than the spirit of 



24 ?HE NEW REPUBLIC. 

property asserting itself against those things that 
tend to smother the genius of enterprise among 
the masses. And it should be remembered that 
the spirit of property is a principle of relative 
value and application, that encouraged beyond 
certain limits or restrained too closely it becomes 
destructive of the end it should conserve, andv 
that a just equipose of this force constitutes the 
happy equilibrium— the most perfect state of so- 
ciety being, certainly, where the spirit of enter- 
prise is possessed by the greatest possible num- 
ber of citizens. The healthy condition of the en- 
terprising spirit can not be measured by any ar- 
bitrary ratio of wealth increase or. profit increase, 
nor by any particular opportune conditions,' from 
the fact that opportunities vary with time and 
place as well as with circumstances. The chances 
for rate of increase can not be fixed, and may be 
at one rate now or here and at another rate then 
and there; yet, so long as profit is likely to be 
realized, the spirit of enterprise manifests itself. 

I think, however that the most healthy condi- 
tion of enterprise is where no particular fixed mar- 
gin of profit is known and where the probabilities 
are that it will be moderate. If there is no op- 
portunity for collecting a competency, the citizen 
becomes a spiritless slave — proletariat; if the 
profit is great, out of proportion, he becomes a 
reckless spendthrift or a sordid misanthropist. 



THE NEW REPUBLIC. 25 

Experience teaches us that moderate opportuni- 
ties make the best business citizen, and that the 
man with moderate income is less liable to ex- 
cesses and to failure than one with an income of 
ten or twenty times as much, and that fortunes 
easily acquired are seldom preserved, while the 
man,, who knows how it comes, knows how to 
take care of it. 

But, one man is not inclined to envy another 
more fortunate than himself, nor to complain of 
his lot, in the matter of wealth accumulation, so 
long as the regulations of society are such as to 
guarantee fair opportunities and justice. Let its 
institutions and legal regulations be such that 
one man may be seen accumulating a fortune 
which other men have produced and a part of 
which they rightly own, bat for a class privilege 
that cheats them out of it, and unrest and discon- 
tent are soon manifested. The business move- 
ments of society, under these circumstances, take 
on the nature of a lottery; recklessness, luxury, 
effeminacy, pride and the spirit of ap p r dnjnuiun ^W 
follow inordinate gain, on the one hand, while a ' 
spirit of envy, hatred and misanthropy takes pos- 
session of those who have reasons to believe 
themselves unjustly dealt with. 

On the other hand, let government, through 
the right drift of legislation, deal out justice to 
the creators of wealth and assist in making and 



26 THE NEW REPUBLIC. 

opening out opportunities for them, and happi- 
ness and content will follow prosperity as the 
planets follow the sun in its course among the 
stars, and civilization will bloom into a millen- 
nial fruition. 

CENTRALIZATION VS. PATERNALISM. 

The masses of the American people are in- 
stinctively opposed to a centralized government 
and are ever apprehensive of movements or ten- 
dencies in that direction; but I think there is a 
widespread misapprehension as to what tends to 
cause and what really constitutes centralization. 

Centralization and paternaalism are frequently 
confounded. Centralization of power, or a growth 
of nationalism, or an exercise of supervision over 
a wider range of functions, is but the natural re- 
sult of national development and diversified indus- 
tries, but the increase of paternal authority is not 
necessarially an evidence of that form of central- 
ization that is inimical to democracy; for, the 
government is but a business enterprise and re- 
quires supervision; and, if the people's business 
is extensive (and if the people rule and develop 
industries their business will become more exten- 
sive), it will require supervision proportionally 
to development, and, while it may be termed pa- 
ternalism, it is not that form of centralization of 
power that has heretofore, in the history of the 



THE NEW REPUBLIC. 27 

world, led to despotism, nor will it lead in that 
direction. 

The form of centralization to be feared is the 
accumnlation of wealth by a class ont of all -jnst 
proportion and known as plntocracy, the result of 
which is a centralism of power into the hands of 
a class of wealthy men who dominate legislation 
to their own interests and against the interest of 
the people. This plutocratic form of centralism 
seeks the conduct and management of the func- 
tions of government by as small a head as possi- 
ble and by as few departments as possible — cen- 
tering power in a few hands and tending toward 
despotism or Csesarism. This class cry out 
against numerous departments or heads ol gov- 
ernment and designate as paternalism the man- 
agement of the government by the people for the 
common good. 

A great deal of confusion exists in the minds 
of some people on the question of state's rights 
and what may seem a growing tendency of the 
general government to usurp authority belong- 
ing to the state, but it has been settled by war 
and by legislation that the nation is above the 
state and is the supreme authority over the peo- 
ple, and this gives to the national government 
the unquestioned prerogative of determining its 
own powers and functions. This prerogative is a 
fixed quantity against which it is a waste of time 



28 THE NEW REPUBLIC. 

and energy to theorise, and to worry over it is 
simply "kicking against the pricks." It only 
a question for the government, from time to 
time, to determine her course and she w ill not 
consult a minor member as to the wisdom or just- 
ness of her conduct. That which seems to her as 
the proper element of her supervision she will 
take hold of and conduct, and a little reflection 
will, I think, teach us that the matters proper for 
her supervision are those things that partain to 
all the people, or nearly so; and it matters not 
how many things it may be. 

Numerous departments does not of necessity 
constitute centralism, for the reason that each is a 
separate part of the government, any further than 
the power of appointment in the president may 
work a centralism, which, however, with the con- 
sent of one or both houses of congress elected by 
the people, is yet in the hands of the people and 
therefore not an absolute power. 

The development and diversification of indus- 
tries necessarially makes more business to be 
looked after by the people, and it is only through 
organized heads that it can be done, and, unless 
done in this way, it will not be done at all, and 
such leaving undone is the hope of plutocracy 
and the leading toward despotism. 



CHAPTER III. 



THE LAW OF PRODUCTION AND CONSUMPTION — 
OVERPRODUCTION WHAT ? 

My purpose, in this chapter, is to show that 
the causes of the periodical business depressions 
that characterize modern progress, are not to be 
found in the natural play of the forces of produc- 
tion and consumption, but that they are con- 
nected more properly with the laws of distribu- 
tion, where I propose to trace them. 

A very little reasoning will, I think, teach us 
that the production and consumption of commod- 
ities naturally tend to move smoothly and har- 
moniously together, without jar or hindrance. 

In the primitive state of society production and 
consumption are the only forces taken into ac- 
count. Each produces what he consumes and 
consumes what he produces, and, it is not until 
production becomes diversified and consumption 
refined that distribution enters in as the great 
economic factor of civilization. Naturally, then, 
and prior to the invention of machinery, aside 
from the accidents or environments of distribu- 
tion, the forces of production and consumption 
play harmoniously. 



30 THE NEW REPUBLIC. 

Consumption creates demand, demand stimu- 
lates production; production gives supply and sup- 
ply satisfies consumption, and the two are inter- 
dependent and mutually satisfying and stim- 
ulating. 

Taking a society of multifarious parts and in 
an active condition of progress, supply and de- 
mand must necessarily act with a regularity also, 
comparatively speaking, from the fact that they 
are inter-dependent, (and when w r e speak of sup- 
ply and demand we speak of production and con- 
sumption), and, as the stream of supply or pro- 
duction will be regular and dependent upon de- 
mand or consumption, so will the stream or force 
oi consumption, for the same reason, also be reg- 
ular and steady, barring some temporary and arti- 
ficial interruption or inequitable adjustment. 
True, an article now and then goes out of use or 
into disfavor because of another article taking its 
place to a better purpose, but this change from 
the use of an inferior to that of a superior product 
may be seen to be also a gradual process, and the 
general law remains that consumption draws on 
production with a regularity of action that will 
preclude the possibility of fits, jerks and spasms 
in the business and commercial world, except so 
far as these diseased symptoms may resuli from 
causes to be found in the process of distribution. 

This principle of regularity and harmony in 



THE NEW REPUBLIC. 3 1 

the processes of production and consumption may 
be made to appear more lucid by a very simple 
illustration. Take the production of shoes. The 
manufacturer knows, before engaging in the bus* 
ness, about what there is in it, the cost of the ma- 
terial and labor, and the average demand for the 
class of goods he contemplates producing, and, 
once established in business, he increases or de- 
creases, gradually or otherwise, his processes and 
the amount of goods turned off, according to the 
success he meets with, increasing with increasing 
demand, decreasing with decreasing demand, and, 
aside from the operation of some artificial or acci- 
dental cause, there will be no sudden crisis in the 
operation in question. People accustomed to 
wearing shoes will not all conclude, at once, to 
go without them, nor will all those unaccustomed 
to wearing shoes, at once conclude to wear them. 
The same is true in the various branches of pro- 
duction, and, taking all together, the operations 
of an entire society will be more regular than 
those of a single branch, from the fact that a cri- 
cis occurring in one branch of production, from 
accidental causes, would be only an ailment of 
one of the many thousands of members and could 
produce no general catastrophe. 

Another simple illustration may be given, cal- 
culated to throw some light as to the origin of 
that condition in society erroneously termed "ov- 



32 THE NEW REPUBLIC. 

erproduction." Take the case of A, a butcher, 
and B, a baker, who are trading together and who 
are absolutely dependent upon each other for 
their respective supplies of meat and bread. Sup- 
posing the wants of each of the families to be reg- 
ular, the production of each will be an exact reg- 
ularity also, and will all be consumed. Now sup- 
pose that, from some cause, A is unable, either 
directly or indirectly, to get to B : s place of busi- 
ness and cousequently unable to procure bread, 
and that B finds himself in a similar predicament. 
Each will, in such a case, have, in a short time, 
a superabundance of his own product; while each 
will, at the same time, be entirely destitute of the 
product of the other, and we find the conditions, 
of "overproduction" and destitution existing con- 
temporaneously, and, as we can in this simple il- 
lustration see, resulting from the simple fact that 
"production and consumption can not meet and 
satisfy each other," as Henry George says. A 
will be worrying about his inability to procure 
bread and B about not succeeding in getting his 
usual supply of meat, while the outside observer, 
who, we will suppose, is ignorant of the causes 
and conditions in the premises, steps in and won- 
ders both at the accumulations of each party of 
his special production and at the complaint of each 
about not being able to procure what he stands in 
need of. When questioned as to causes, the said 



THE NEW REPUBLIC. 33 

observer, judging from his observation of the 
stored-up products of each and from this fact 
alone, concludes, with gusto, "overproduction. n 

Should the observer be informed by each party 
that neither were producing more than the usual 
amount and that each stood in need of the other's 
product, he could readily see, in this simple and 
isolated case, that the only trouble was that the 
parties had only failed to exchange products and 
would probably point out a remedy; but in the in- 
tricate network of society, where thousands of 
products of producers and consumers are involved, 
the situation is more obscure, because of the ex- 
changes being indirect rather than direct as in 
the illustration. 

But let us proceed with the discussion a little 
differently. The condition called "hard times," 
and as supposed to result from "overproduction," 
but which nevertheless presents the absurdity of 
confusing cause with effect, is characterized by 
a constant and never-varying set of symptoms 
which are, (1) decreased exchanges, (2) falling 
prices, (3) lack of employment for labor and there- 
fore suffering of the poor, (4) a consequent de- 
creased consumption, (5) a consequent accumu- 
lation of products in the hands of producers, and 
(6) a then consequent decreased production; and 
if the last symptoms are consequential and if they 
really exist, we have the absurdity as presented 



34 THE NEW REPUBLIC. 

in current theories, of plenty producing want, 
and of decrease producing increase, or the sub- 
traction of one number from another giving a re- 
mainder greater than the sum of their addition. 
These symptoms or conditions are so inter- 
dependent and co-related, one necessitating the 
other, that it is not without difficulty that cause 
is often distinguished from effect, but I think it 
must at least appear clear that the conditions of 
accumulated production here, and that of want 
there, co-existing, points, for a cause, toward a 
diseased condition of distribution. 

I can not close this article without reference to a 
currently proposed remedy for hard times — econ- 
omy. The parties A and B, referred to in the fore, 
going illustration, meet and hold a consultation 
over the situation, and holding current notions, A 
suggests to B the propriety of economizing. B re- 
plies "I have turned off my hired man and cut off 
other expenses, yet I haven't succeeded in pro* 
curing what you produce," at which A [exclaims, 
"and I have discharged my hired girl, and doubt- 
less she and your hired man are tramping the 
country in search of means of support." After 
consultation A and B strike upon a plan of re- 
establishing their former relations. A begins to 
use more bread and re-instate his servant, while 
B likewise begins to increase rather than curtail 
expenses; the unemployed secure work, want dis- 



THE NEW REPUBLIC 35 

appears, production goes on, and all because "pro- 
duction and consumption were made to meet and 
satisfy each other," and thus demonstrating that 
the condition called "overproduction" is simply a 
symptom of a diseased condition of exchange, a 
term used to denote an unexplained economic 
phenomenon. 

But there is such a thing as over-production, 
in one sense, and it results from the unfair distri- 
bution of the benefits that accrue from the use of 
machinery. Here is where the forces of produc- 
tion and distribution become so confused together 
that it is not always easy ol dilucidation to all 
minds. But I am writing for practical purposes 
and it is not necessary to draw fine distinctions. 
Under the wage system, the employer or owner 
of the instruments of production receives an ex- 
cessively major portion of the products of indus- 
try or of that which, in the round of trade, repre- 
sents products; and, this being more than the 
employer consumes, there drifts upon the market 
a surplus of products. The employe can use no 
more than his wages will procure, while the em- 
ployer can not use up his portion. It is true the 
employer will use proportionally more than the 
employe, if not in the exact products, in other 
products obtained through exchange and trans- 
fer, and will give employment to other forms 
of labor; but, his portion is so great comparatively, 



36 THE NEW PEPUBLIC. 

there is yet an accumulated surplus. This sur- 
plus of products causes a fall of prices, when in 
consequence the employer curtails production, 
with the view of having the surplus consumed, 
and the employe being thrown out of work, con- 
sumes less, and the condition of hard times and 
overproduction supervenes. 

Now here is a result following the appropria- 
tion, by a class, of the instruments of production, 
a name to which must be given, by the class 
which has too much, without explaining the 
causes to the class which has too little; and 
the former names the condition, correctly as 
it applies to that class, overproduction; while the 
latter repeats the word, sees plenty around him 
which he can not get and wonders how it has 
been brought about. 

A little reflection will show us that this condi- 
tion might supervene locally and to some extent 
independently of the conditions of distribution 
generally and the reader may bear this in mind: 
that is, that, while the greater questions are in 
the laws of distribution, those of production 
must hold a place. 



CHAPTER III. 



DISTRIBUTION — LAND DISTRIBUTION — THEORY OF 
HENRY GEORGE. 

"The most happy state of society is where every 
man has a home and lives in it and the world is 
at peace." — Confucius. 

In the various forms of government that have 
evolved from the primitive state, the institution 
of landholding has necessarially characterized 
all, and a question of continued and recurring con- 
tention has been, the manner of it's holding and 
the legislative restrictions over it. Land in com- 
mon, large holdings by a class and subdivision 
into small holding, have been the forms agitated 
and adopted at various times and in various soci- 
eties; and, what system is best adapted to our 
civilization, and what part the land question plays 
in economics — whether cause or result of other 
mal-adjustments — are questions of great impor- 
tance to the American people and will be consid- 
ered in this chapter. 

It has been claimed, but by what author I have 
forgotten, that 4 the characteristic sentiment of 
the Anglo-Saxon race is a desire to own a perma- 
nent home/ and I think the statement may be 



38 THE NEW REPUBLIC. 

made as a fundamental truth, that this sentiment 
is the basis of real progress and civilization. In 
an essay to the French people in 1790 on "ihe sale 
of the domain land," M. Volney laid down the 
following principle: "The force of a State is in 
proportion to its population; population is in 
proportion to plenty; plenty is porportion to 
tillage and tillage to personal or immediate 
interest — that is, to the spirit of property. 

Whence it follows that the nearer the culti- 
vator approaches the passive condition of the 
mercenary, the less industry and activity are to 
be expected from him; and, on the other hand, 
the nearer he is to the condition of a free and 
independent proprietor, the more extension he 
gives to his own forces, to the produce of his lands 
and to the general prosperity of the State." 

Centralization of wealth into the hands of the 
few is conceded on all hands to be the forerunner 
of despotism and, of all things, the most danger- 
ous to republics; and, land being the basis of 
wealth generally, or that form of wealth, the mo- 
nopolization of which is considered the most to be 
feared, very naturally this form of holding is the 
most inimical to our 'institutions. 

Centralization of wealth into the hands of a 
class, and a progressively smaller class, seems to 
have been the culmination of governmental effort 
preceding the downfall of ancient nations. In 



THE NEW REPUBLIC. 39 

Egypt, in Babylon, in Greece, the land of letters, 
and in Rome first the greatest republic and after- 
wards the Empire of iron, the work of statesman- 
ship has been the centralization of land into the 
hands of a small percentage of the population, 
following which, with the certainty and regularity 
of the movements of the stars in their orbits, has 
come confusion, revolution, decay and reconstruc- 
tion under new forms and new conditions. 

As remedies for this centralizing tendency, to 
prevent in some cases and to cure in others, 
various, and often plausible, plans have been 
offered by legislators and reformers: small hold- 
ings by the Gracei of Rome unsuccessfully, the 
peculiar system of reversion and prohibition in- 
stituted by Moses, etc. 

The most prominent innovator of the present 
time, who has attracted attention, is Henry 
George, with the claim that "private property in 
land" is the dragon to be destroyed, and offers, as 
a complete remedy for all ills of society and as 
the only means of progress to a higher civilization, 
"land in common," or "appropriation of rent by 
taxation." Beginning on page 250 of his "Pro- 
gress and Poverty," we read: "For the ownership 
of the land on which and from which a man must 
live, is virtually the ownership of the man him- 
self, and in acknowledging the right of some indi- 
viduals to the exclusive use and enjoyment of 



40 THE NEW REPUBLIC. 

the earth, we condemn other individnals to slavery 
as fully and as completely as though we had 
formally made them chattels. In a simple form 
of society where production chiefly consists in 
the direct application of labor to the soil, the 
slavery that is the necessary result of according 
to some the exclusive right to the soil from which 
all must live, is plainly seen in helotism, in vil- 
lainage, in serfdom." 

While this must all be admitted, yet Mr. George 
here supposes that one class owns the land to the 
exclusion of the remainder, and draws an infer- 
ence which can not be drawn when we suppose a 
subdivision of land; nor does he make a distinc- 
tive point, in favor of the theory of land in 
common, as against that of subdivision into small 
holdings of absolute ownership, which we think 
the better system. 

Again, "It is slavery of this kind to which the 
enduring pyramids of Egypt yet bear witness, and 
of the institution of which we have perhaps a 
vague tradition in the biblical story of the famine 
during which the Pharaoh purchased up the land 
of the people. It was slavery of this kind to 
which, in the twilight of history, the conquerors 
of Greece reduced the original inhabitants of that 
peninsula, transforming them into helots by mak- 
ing them pay rent for their lands. It was the 
growth of the 'latifundia' or great landed estates 



THE NEW REPUBLIC. 41 

which, transmuted the population of ancient Italy 
from a race of hardy husbandmen, whose robust 
virtues conquered the world, into a race of cring- 
ing bondsmen; it was the appropriation of the 
land as the absolute property of their chief- 
tains, which gradually turned the descendents of 
free and equal Gallic, Teutonic and Hunnish war- 
riors, into Colonii and Villains, and which 
changed the independent burghers of Scalavonic 
village communities into the boors of Russia and 
the serfs of Poland," etc. 

Certainly. But, in the transformation cited, 
did not the changed conditions result from chang- 
ing a proprietor into a renter? Was it always 
land in common, or ownership in subdivision, 
that constituted the happy state preceding the 
subjugations referred to? What Mr. George is 
here really condemning is land centralization, or 
its appropriation by a class that has the power 
to exact in rent whatever amount that suited their 
fancy, even to all, save a bare subsistence in mis- 
ery. Yet in the same connection the author goes 
on to condemn private property in land, making 
no distinction between the two extremes of a great 
subdivision and a great centralization. 

Mr. George deplores very rightly the tendency 
in this country to land centralization, and seems 
to conclude that ownership at all must necessar- 
ially ultimate in centralization into a few hands, 



42 THE NEW REPUBLIC. 

evidencing which we read, page 269, "These great 
estates by the power with which the greater at- 
tracts the less, in spite of temporary checks by 
legal limitations and recurring divisions, finally 
crushed out all the smaller proprietors, adding 
their little patrimonies to the latifundia of the 
enormously rich, while they themselves were 
forced into the chain-gang became rent-paying 
Colonii, or else were driven into the freshly con- 
quered provinces or to the metropolis to swell the 
ranks of the proletariat who had nothing to sell 
but their votes." Here the writer intimates that 
his reason for condemning private property in 
land is the supposed lack of power, on the part 
of legislators, to prevent centralization, or to pro- 
vide legislative conditions calculated to operate 
in the direction of subdivision. 

But how are we expected to be able to pass from 
the present system to land in common, if unable 
even to legislate limitations or subdivisions? I 
think that, in the case of Rome and other ancient 
states, it was not a natural law of attraction that 
caused the larger estates to absorb the smaller. 
There is no such law, and it can only be through 
the means and instruments of exchange and by 
means of legislative exemptions, restrictions and 
favoritism that can bring about the conditions 
mentioned as having come upon the nations gone. 

Admitting that the nations possessed the 



THE NEW REPUBLIC. 43 

greatest force and the people the greatest pros- 
perity when land was owned and held by a great 
number and that its centralization into the hands 
of the few was follpwed by evil consequences 
sought to be everted, Mr. George admits that cen- 
tralization is what we should guard against, and 
that reasonable limitations in private holdings 
is the remedy so far as the land question is con- 
cerned. While centralization of land is the con- 
dition to be guarded against, it is, like other con- 
ditions, a result and not so much a cause. 

The author of "Progress and Poverty" seems 
to argue the land question from the standpoint of 
a supposed state of anarchy, where each member 
of society is free from all legal restraints and 
where the survival of the fittest, free pitch in 
theory holds sway. We may note this in the fol- 
lowing, Page 250, "P. and P:" 

"Place one hundred men on an island from 
which there is no escape, and whether you make 
one of these men the absolute owner of the other 
ninety-nine, or the absolute owner of the soil of 
the island, will make no difference either to him 
or to them. In the one case, as in the other, the 
one will be absolute master of the ninety-nine." 
True enough; but let us suppose that the hundred 
start out, each with equal quantities of land and 
with regulations prohibiting any change in owner- 
ship, then certainly the condition of slavery can 
not supervene. 



44 THE NEW REPUBLIC. 

But let us proceed a step further with Mr. 
George's argument against private property in 
land in subdivision. On Page 234 the author of 
"Progress and Poverty" asserts that "should the 
few thousand landowners of Great Britain be in- 
creased to two or three millions, these two or 
three milions would be gainers but the remainder 
of the population would gain nothing," and con- 
cludes that "The subdivision of land can do noth- 
ing to cure the evils of land monopoly or in im- 
proving the condition of the lower classes." How 
he can come to such a conclusion after stating 
that nations flourished in glory when land was 
subdivided, I am unable to conceive, 

Let us suppose a community of ten thousand 
where ten men own the land, composed of ten 
estates. A part of the remainder are tenant 
farmers and a part artizans and laborers. The 
ten men have about their own way; the tenant 
farmers are sorely ground down with rent bur- 
dens, and the artizans and laborers, supplying 
the wants of the few landowners are also reduced, 
since the farming class are too burdened to em- 
ploy labor of any class. In fact the farmers, 
artizans and laborers are found frequently ex- 
changing positions, like two men each with a poor 
horse who would readily trade in the vain hope 
of striking a profitable bargain. The wants of 
the ten proprietors will draw on the labor of the 



THE NEW REPUBLIC. 45 

artizans and loborers, only spasmodically, accord- 
ing to the well kown inclinations of a luxurions 
and effeminate class, and we may guess the con- 
dition of the community as anything but happy, 
excepting that of the landlords. We will now 
suppose the ten estates as devided into one thous- 
and, each owned by an independent proprietor, 
the remainder of the citizens, artizians and 
laborers, as before. The aristocracy has now dis- 
appeared, leaving the other classes no drones to 
support. The saving now of rent goes to, or is 
saved by, the landowners, who, in this new condi- 
tion of prosperity, will all contribute much to the 
artisans and laborers in the more general employ- 
ment of labor and purchase of works of art. With 
the supposed change in the foregoing illustration 
who can deny that private property in land in 
small holdings is, to say the least, far preferable 
to centralization into a few hands, or that labor 
would not be benefitted by subdivision? 

On page 232, "Progress and Poverty," it is ar- 
gued again that subdivision of land would tend 
to check or diminish production. As the latti- 
fundia of Rome grew in area, in the same ratio 
were vast tracts of land vacated, and in Great 
Britain to-day vast bodies of land are being con- 
verted into private parks by the rich landowners, 
many of whom seek pleasure rather than wealth 
additional. Is it natural to suppose that the man 



46 THE NEW REPUBLIC. 

possessing thousands of acres and money plenty- 
would crowd the last acre to produce as carefully 
and as certainly as would the man possessing but 
forty and in need of what might be produced from 
it? It may have been observed, in isolated cases, 
that the possessor of a large area of land in an ab- 
normal desire to create a fortune, might produce 
more from the same amount of land than an in- 
dolent small holder; but to take into considera- 
tion the multifarious forms of domestic produc- 
tion, in both the vegetable and animal varieties, 
it requires but little reflection to convince us that, 
as a rule, numerous homes of absolute ownership 
is a superior form of land occupancy to broader 
fields with no homes on them. Besides, a fever- 
ish state of production is neither evidence of 
lasting prosperity, nor necessary for the good 
order of society. The machine that runs too fast 
wears out the sooner, and the best cultivator of 
the soil is the occupant who feels enough inter- 
est in the land to give it reasonable rest and at- 
tention-. Who will do this more than the abso- 
lute owner? Certainly not the man who occu- 
pies to-day and vacates to-morrow. 
be ou " 




THE NEW REPUBLIC. 47 

Reading "Progress and Poverty through, how- 
ever, it has impressed me similarly to a novel 
that ends in disappointment; for after showing from 
history and otherwise, the direful consequences 
of land monopoly, and advocating land in com- 
mon from every possible standpoint of consider- 
ation, the author proposes to remove all restric- 
tions to land accumulation or centralization, save 
the taxation of rentals. Page 292 we read, "Let 
landowners retain possession of their land and 
call it their own. Let them buy and sell, be- 
queath and devise. It is not necessary to confis- 
cate land, but only necessary to confiscate rent," 

or "to appropriate rent by taxation." "Inform 

the ownership of land would remain just as now. 
No owner of land need be dispossessed and no re- 
strictions need be placed upon the amount of land 
anyone could hold." And, in connection with this 
only change of diverting rent from the landowner 
to the government, taxes are to be taken off of 
every other species of property. Is this a remedy 
for land monopoly and for the suffering and pov- 
erty of the poor? We think not altogether. 

In the first place the remedy does not suppose 
the non-possible existence of forms of wealth ac- 
cumulation other than land. It does not touch 
upon the system of government bond monopoly 
of stock and loan companies of various kinds, and 
general monopolistic manufacturing combinations 



48 THE NEW REPUBLIC. 

that, in various forms, have fattened upon gov- 
ernment favor and exemptions and the labor of 
the millions through all ages, only that it pro- 
poses to exempt these classes from the burdens 
of society. It proposes the taxation of rent, but 
the "leaving to landowners a percentage of rent, 
which would probably be much less than the cost 
and loss involved in attempting to rent land 
through state agency." Now it seems that Mr. 
George here contemplates the owning of land, 
under his plan, by corporations or large holders, 
and I am frank to say that such would be the re- 
sult. For, certainly, a confiscation of a part or 
the whole of the rentals would discourage small 
holders and throw land upon the very rich who 
are always satisfied with a low rate of interest on 
their investment, provided it is perpetuated. 
Then the rich class and the state are to enter 
into a partnership in landholding, and each is to 
receive a portion of the returns. Admirable 
combination! 

The rent is not (because it could not) to be 
placed at any given rate, nor to be adjusted so as 
to fluctuate with the changing fortunes of ten- 
ants, and there would be no tendency toward re- 
duction at the instance of landlords and no prob- 
ability of an effort in that direction by the state, 
from the fact that land is the only source of a 
necessary revenue. Land monopoly then would 



THE NEW REPUBLIC. 49 

continue as it ever has. The tenant or cultivator 
would be in no better fix than now, yet "P. and 
P." affirms that what ruined Egypt and Greece 
was the purchase of the land by the Pharaohs 
(state) in the former, and the "payment of rent" 
to the landlords in the latter. Besides, what is 
there to prevent people from renting unoccupied 
land now, and would taxing it more, or changing 
the ownership to the state or to a corporation, 
tend to encourage its occupancy or to relieve the 
condition of the poor? Wherein would it tend to 
a more equitable distribution of wealth? 

Again, under the plan proposed by Mr. George, 
taxes and consequently rent would be more gen- 
erally exacted in money and prompt payment 
demanded, which would force the sale of products 
in the most unfavorable markets; and, under ex- 
isting systems of money and trade regulations, 
the rent-paying farmer would be reduced, by 
forced environments, to the possibilities of a bare 
subsistence and descend to an awful condition, 
similar to that so correctly depicted by Mr. 
George as existing in the declining days of 
Greece and Rome. 

But according to all rules of business the rent 
of land would be more oppressive upon the tenant 
(supposing a tenacy) from the fact that the owner 
of land, having a given amount of money invested 
in it, will aim to make a profit over and above in- 



50 THE NEW REPUBLIC 

terest and taxes, and if taxes are more he mnst 
have more rent if possible. This principle of bus- 
iness is too well understood to require extended 
comment. The only way possibly to help the 
condition of the tenant would certainly be to lower 
the rent, but evidently this can not be done by 
increasing taxes. 

On page 206 "P. and P." the author lists a num- 
ber of monopolies aside from land and says it 
would be unjust to tax them, because taxing pro- 
ductive industries tends to check and hamper pro- 
duction. 

What is land in the hands of the owner but so 
much capital invested in land as a matter of choice 
or judgment, the same as it is invested in various 
enterprises? The various forms of enterprise are 
continually changing places and all wealth is sub- 
ject to interchange every year, month and day. 
The owners of wealth or capital are ever changing 
its position, as a matter of choice and as it may 
seem from time to time the more profitable, in this, 
that or the other field. A man owns land to-day; 
to-morrow it is exchanged for stocks or bonds or 
(nvested in a business venture, and so the owner- 
ship of land is but one of the tangents or parts of 
departure for the investment of money. A man 
invests in land on the same principle that he does 
in anything else, and when land is taxed we are 
taxing production as much so as anywhere else. 



THE NEW REPUBLIC. 5 1 

And pray, in the name of reason, why, in the cir- 
cuit of capital investment, should we stop at land 
and say, at this point or if capital stops, or when 
it stops here, we will catch it and impose a bur- 
den that is to be applied nowhere else? The state 
has the right to tax, and should tax, the more for- 
tunate members of society truly, but why say that 
they shall be exempt from this burden so long as 
they do not invest in land and double the burden 
so soon as they do? And does the imposition of a 
tax tend to discourage all industries save farming, 
while it must encourage that? By what rule of 
philosophy is this proven? Where do we gener- 
ally find the. delinquent tax list? On land very 
generally, which certainly does not demonstrate 
that land should pay all the taxes. And whoever 
heard of a monopoly in manufacturing, mining, 
money-lending, etc , going down on account of tax 
burdens? 

History is replete with instances of national de- 
cay and degredation attributed, and correctly at- 
tributed, to onerous impositions of tax burdens 
upon the rural and agricultural populations. 

The author of ,( P. and P." recites quotations 
from Rev. W. S. Tennant, Miss F. Nightingale 
and Macaule}', on the squallor and misery exist- 
ing in India because of the burdensome taxes and 
government rentals on land and the usury of 
money-lenders, yet, as a remedy for similar evils, 



52 THE NEW REPUBLIC. 

lie would add to, rather than take from, the bur- 
dens of landholders and tenants, and writes a large 
book on political economy, in which no remedy 
for the robber systems of money manipulators is 
offered, unless his land tax theory is such a 
remedy. 

On page 303 "P. and P." the author absolutely 
claims that the state should take in taxes the entire 
rental. When you take all the returns from a 
man's investment you take the investment itself. 
Under these circumstances a man's land would 
simply be confiscated by the state, for the owner 
could neither get any return on his investment nor 
sell it to any one else, for the same reason. 

A great many people, previous to the war of the 
rebellion, were in favor of the government buying 
the slaves from the master, since they were chat- 
tels and the owners had their money invested in 
them. It would have been the cheaper plan, and 
just, from a business standpoint. And, if the gov- 
ernment is going to confiscate the property of the 
citizen because he has invested it in land, it should 
pay for it. If she takes all the rent in taxes this 
would certainly be the result, and the owner, if he 
continues to occupy, is simply transformed into a 
cash-paying tenant, who would in many instances 
fail and the land would pass into the hands of the 
government. It can not be argued that the gov- 
ernment could, after thus acquiring land, rent it to 



THE NEW REPUBLIC. 53 

another at a lower tax, because this would be sim- 
ply robbing one man for the benefit of another; 
and if she can do this, obviously would the culti- 
vation of land be encouraged by a change of own- 
ership? Any vacant land in America can be 
rented to-day the same as it could be under gov- 
ernment control. 

In book VII., "P. and P." Mr. George squarely 
advocates the confiscation of land, without com- 
pensation to owners. 

On page 310 of "Progress and Poverty," Mr. 
George, in supposing that a great stimulus to pro- 
duction must follow the adoption of his plan, says 
"this in turn would lead to an increase in the 
value of land;" yet in drawing a highly colored 
picture of its prophesied results, on page 313, he 
infers that "the selling price of land would fall 
and land speculation would receive its death blow." 
Where "the value" of a thing "increases," I can 
not see how "its selling price would fall." Look- 
ing from one side of the proposition, we see that 
a man who owned land would want to sell as soon 
as taxes were doubled on it; but, from the other 
side, we see that the cause that induces him to 
sell tends to prevent another from buying, and so 
the plan would have neither the effect of encour- 
aging or discouraging speculation. 

When we come to the comparative situation of 
improved and unimproved land, there are sug- 



54 THE NEW REPUBLIC. 

gested different probabilities. Take a vacant lot 
in a city or a tract of unused land. If taxes are 
increased the owner, under the George system, 
concludes to either sell or improve. If he is able 
he may erect buildings thereon, but, if unable to do 
this, he may be forced to sell at a low figure to 
one more able to improve; so that the plan, in this 
case, only encourages land manopoly and central- 
ization of wealth. If the small landowner is taxed 
more he is more inclined to sell, while the land- 
lord, who lives on rent rather than on cultivation, 
can better afford to buy so long as there is a mar- 
gin of profit from rent after deducting taxes. 

A man would approach his neighbor, under the 
plan of Mr. George, and say, "you are not able to 
improve this land, but if you will sell it to me for 
a reasonable price, I will then rent it back to you 
at a very moderate rental." But after the bar- 
gain is made to sell or after sold, the owner places 
the reut where he pleases to the seller or the next 
applicant, and this is about the way the plan 
would work as it seems to me, and thus, again, 
we see the monopolistic tendency of the George 
system. 

Let us revert again to the matter of increased 
production as is predicted to follow the George 
plan and which is offered as an argument in its 
favor. Does an unnatural crowding of productive 
forces always tend to the promotion of happiness 



The new republic. 55 

and comfort? From the standpoint of political 
economy it is not a question of quantity as much. 
as one of relative enjoyment and distribution. We 
need entertain no fears as to whether or no there 
will be enough produced, but should rather con- 
cern ourselves about the proper distribution of 
products. And, it is a matter of easy demonstra- 
tion that a plan which would carry production to 
a high degree, might, at the same time, entail 
misery and wretchedness on the producer. 

Suppose a community where exists everything 
favorable for a high state of production, machin- 
ery, rich soil and population. If a few men own 
all the natural advantages, all the wealth and in- 
struments of production, and the remainder of the 
inhabitants as well, they may crowd production 
to the highest pitch, and yet appropriate all to 
the gratification of their desires, while the real 
producers may be reduced to absolute misery, to 
the point of mere animal existence. 

On the other hand, if we suppose the commun- 
ity divided into equal proprietors, we see a condi- 
tion favorable for substantial comfort for all, yet 
they are not obliged to produce beyond their own 
necessities and inclinations. There may not be 
so much produced, but there is a better condition 
generally. 

The slaves of the south, in days anti-bellum, 
produced more than the freedmen of to-day, yet 



56 THE NEW REPUBLIC. 

they only received a subsistence. Their condi- 
tion has been little improved, however, owing to 
their exclusion from the land and the consequent 
appropriation of their labor by rent, which is the 
same thing as the "appropriation of rent by tax- 
ation." 

SPECULATION IN LAND AS THE CAUSE OF BUSINESS 
DEPRESSIONS. 

A proposition of Mr, George, in keeping with 
his general theory, is that speculation in land is 
the cause of the periodic depressions of business 
that has so generally marked the progress of so- 
cieties. Is it true? 

What is speculation in land? It is buying and 
selling and trading in land at the option of the 
owner or from forced circumstances, and Mr. 
George tells us in his argument for the appro, 
priation of rent by taxation, that "it will not be 
necessary to confiscate land," and that landown- 
ers "may continue to own, to buy, sell, devise 
and bequeath land as usual;" yet he has squarely 
condemned all forms of private holding in previous 
part of his book, to which we have referred. 

That there should be, in any new country, a 
steady advance in land values growing out of the 
regular progressive development of industries 
and increase of population, is natural, but to sup- 
pose an advance in price of land out of proportion 



THE NEW REPUBLIC. 57 

with the general advance of productive forces, I 
can not concede as reasonable. It would seem 
that, all other things being equal, the advance in 
price of land would be regular, that it would only 
keep pace with productive forces, ebbing and 
flowing as production and population ebbs and 
flows. And how is it that the worst of business 
callapses may come suddenly when there is no 
unusual contemporaneous change in land owner- 
ship, and disappear independently of any consid- 
erable commotion in land transfers. 

It may be noted that speculation in land more 
frequently follows than precedes a business crisis. 
In fact it is the crash in the commercial and 
financial world that makes forced sales and gives 
opportunities to the rich, It may be noted also 
that in a business depression land is the last 
thing to change price, and that its price is nearly 
regular all through the crisis, especially among 
the rich. Now, speculation grows out of fluctua- 
tion of prices, and, since the fluctuation in laud 
values is less than anywhere else, it would seem 
that land-ownership in subdivision would have 
the effect of molifying the severity of a business 
crisis rather than otherwise, from the fact that 
the possession of a home and consequent free- 
dom from rent exactions, from either the state or 
the landlord, would be some protection, when the 
means of payment are wanting, as is the case in 
such crisis. 



5§ The new republic. 

The rule is as it seems to me, as regards land 
speculation, that it is governed by the same laws 
that govern speculation in other forms of wealth, 
and, rather than being a cause of depressions and 
commercial catastrophies, it is one of these catas- 
trophies itself, ultimately. It is the result of 
business activity, in the first place and when go- 
ing upward, and, in the second place, the result 
of business depression, going then downward; in 
the first case, tending to subdivide under the play 
of centrifugal forces; in the second case, tending 
toward centralization, under forces centripetal 

Illustrative of the relation that land specula- 
tion bears to good and bad times respectively, I 
cite a transaction, one among many, that came 
under my observation during the last years of 
and immediately after the late civil war. An ac- 
quaintance owned eighty acres of land, all paid 
for, and was getting along fairly. Times began 
to grow flush, money plenty and prices advanc- 
ing. Wheat went to two dollars and fifty cents 
per bushel, and, wheat being the main product of 
his land, he began to dream of approaching for- 
tune. There lay along by the side of his land 
another eighty acres which was offered him at a 
price such as he could see he would be able to 
pay in a few seasons and with the wheat it would 
produce at the advanced price, which he supposed 
would be maintained. He made the purchase, 



THE NEW REPUBLIC. 59 

giving a mortgage on both tracts as security. The 
money of the country contracted, prices went 
down, my friend failed to make the payments, and 
a speculation in land, in the interest of the richer 
man, who took possession of all my friend's land 
under the mortgage, followed. The speculation 
of my friend in buying was the exception, at the 
time, as may be understood, from the fact that 
when prices are advancing, one is about as apt to 
hold as is another to buy, and the same might be 
said when prices are falling. It is the cramped 
condition in which the weaker party finds himself 
that opens the opportunity for land speculation in 
the direction of centralization. 

The centralization of land into large estates is 
a result, as previouslay stated, and not a cause, 
and, until the cause is removed, we may expect 
the result to follow, the same here as in other 
departments of entetprise. It is the instrumen- 
talities and means, by which these results are 
brought about, that concern us and that require 
the scrutiny and investigation of statesmanship, 
and I can but think that the defect of Mr. 
George's disquisition consists in the deploring of 
results, the causes of which he has failed to find 
and consequently failed to dilucidate and lay bare. 
These causes and instrumentalities are the in- 
struments of exchange, as only by exchange can 
wealth be centralized, and they will be dealt with 
lully in succeeding chapters. 



60 THE NEW PEPUBUC. 

The author of "Progress and Poverty" admits 
the incorrectness of his position, however, on 
page 192, where he asserts the trouble, in busi- 
ness depressions, to be that "production and con- 
sumption can not meet and satisfy each other," 
and discovers some of the real causes of these de- 
pressions on page 189, were we read: ".The essen- 
tial defect of currencies which contract when 
most needed, and the tremendous alternations in 
volume that occur in the simpler iorms of com- 
mercial credit which, to a much greater extent 
than currency in any form, constitute the medium 
or flux of exchange; the protective tariffs which 
present artificial barriers to the interplay of pro- 
ductive forces, undoubtedly bear important part 
in producing and continuing what are called hard 
times." This seems, though, to be an admission 
rather than an opinion, judging from what we 
find in other parts of the work we are criticising. 

Mr. George has made some references pregnant 
with thought, namely, the active conditions of 
trade in this country during the war of the rebel- 
lion and in England during the Nepoleonic strug- 
gle, and affirms the cause to be that of enormous 
government expenditure — of a policy of prodigal- 
ity, I might say, instead, of one of economy. In 
part true, but was it not more truly caused by a 
system of exchange which forced "production and 
consumption to meet and satisfy each other?" In 



THE NEW REPUBLIC. 6l 

each instance government credit in the shape of 
a legalized medinin of exchange carried both the 
nations named through their most trying strug- 
gles, in a condition of business prosperity that 
was followed by depression only after the with- 
drawal of the cause of prosperity. And, in the 
case of the United States, when a business crash 
struck England, which should have reached this 
country in 1866, according to precedent, it did 
not come, notwithstanding our then enormous 
destructive forces going on and the necessary ac- 
tivity of speculation during that period from 
causes numerous and patent. 

In Book VI, "Progress and Poverty," the 
author comes to the consideration of the "reme- 
dy" for the increase of poverty, and, to the pecu- 
liar method of argument resorted to here, I desire 
to ask the reader's attention. The author's aim 
now is to center all thought on the notion that to 
make land common property is "the remedy," and, 
as we may suppose, attempts to eliminate all 
other possible remedies. 

Refer to Book VI. and read it critically, and it 
will be seen to overflow with dogmatic assertions, 
assertions naked, postive, yet without proof or 
reasoning. The remedies there condemned and 
that I wish to notice, are "co-operation," "govern- 
ment direction" and "distribution of land." 

Under the head of co-operation > the author af- 
firms that "social evils do not result from a con- 



62 THE NEW REPUBLIC. 

flict between labor and capital," that, "if co-oper- 
ation were universal, it could not raise wages or 
relieve poverty;" that "it is simply a device to 
save labor and eliminate risk;" that "it tends to 
increase rent." To me none of these propositions 
seem proven, and the author finally says that 
"where co-operation has been tried, it has, in 
many instances, improved perceptibly the condi- 
tion of those immediately engaged in it," and 
closes the book by quoting approvingly from an 
eminent author the following: ''We are made for 
co-operation — like feet, like hands, like eye lids, 
like the rows of the upper and lower teeth." 

When he comes to consider government con- 
trol and interference, the author of "Progress and 
Poverty" affirms that "it is itself bad," that it will 
not work without a "strong religious faith, which 
is daily growing less," would lead to "anarchy" 
and "barbarism," that government would "break 
down in the attempt." This government will 
regulate, direct and restrict many thii gs, and yet 
obviate these direful consequences. 

A writer who, in criticising a remedy that 
comes iu opposition to his pet theory, resorts to 
such woeful predictions for the opposition, is cer- 
tainly lacking in substantial argument. 

I have already sufficiently commented on the 
remedy, "distribution of laud," aud only de- 
sire to add here that "Progress and Poverty's" 



THE NEW REPUBLIC. 63 

criticism is no criticism at all, from the fact that 
the author confines his discussion mainly to cases 
where land is subdivided among tenants rather 
than among proprietors. (See "Progress and Pov- 
erty," page 236.) The author says that to re- 
trict the ownership of land "will not decrease 
rent." Why won't it, since a free proprietor pays 
no rent at all? 

As to the proposition to loan money at low rate 
of interest to landowners, Mr. George simply 
says that it "needs no argument to show it would 
lead to ruinous results." (Progress and Pover- 
ty," page 232.) I have at least ventured to argue 
the question in another part of this book, to which 
the reader is referred. (See Money and Its Func- 
tion.) 

The author of "Progress and Poverty" makes 
many fine definitions and distinctions that, while 
interesting as reading matter, are nevertheless of 
that class that we may denominate "hair breadth" 
and "distinctions without differences." For in- 
stance, he devotes much space to showing the dif- 
ference between capital and wealth, when a very 
little reflection teaches us that, for all practical 
purposes of thought, there is really no differ- 
ference, because both capital and wealth, and in 
any and all forms, are interchangable and ever 
interchanging. The absurdity in trying to sep- 
arate the two may be seen in his attempt to prove 



64 THE NEW REPUBLIC. 

that land is not wealth because a gift of nature, 
and that only the product of labor is wealth; also 
that bonds and stocks are not wealth, because 
their destruction would leave just the same 
amount of tangible useful things. Bonds, stocks 
and land are ever interchangable for all other 
things, and why call one by one term and another 
by another? Are they not all stored up labor in 
a sense? A man buys a piece of land at a gi\/en 
price in money that represents his labor, the 
same as do other acquired things; and, if it ad- 
vances in price, after long holding, his labor has 
caused its advance as well as invited emigration. 
If a farm, he has cleared and plowed it; if he has 
simply held it, he has been out of the amount in- 
vested and paid taxes on it, and, after all, it is 
labor. 

Now in Book VII. where the author of "Prog- 
ress and Poverty" deals with the 'Justice of the 
Remedy," he bases his entire case on the positive 
assertion, irrefutablv reasoned out, that a man 
u has the absolute right oj ownership to the ftuit of 
his labor." True enough, but, when he undertakes 
to prove that land is not the result of labor, here 
is where he fails, and, when he fails here, his 
groundwork is gone and the entire superstructure 
topples over. That land is originally a free gift 
of nature, makes not a particle of difference in the 
argument, since, as at present held or held as 



THE NEW REPUBLIC. 65 

proposed by Mr. George, it must be regarded as 
capital, or " wealth used for the production of 
more wealth." 

If, in a given case or in a certain community, 
land is purchased at a low price and advances 
rapidly, without additional cost to the owner, this 
is but one of the many modes of speculation that 
may be observed in various fields of enterprise 
and one of the advantages that the possessor of 
wealth, in any form, has over him who possesses 
less wealth or business judgment. Land must 
therefore be considered the same as other property. 

"Progress and Poverty" is a valuable book and 
has helped clear away many superstitions, and to 
correct many errors in the theories of political 
economists. It demands relief for the people and 
paints in vivid colors the evils of land monopoly, 
but, as for the writer hereof, he shall continue to 
think that land, in reasonably small holdings, 
should be freed from burdens rather than other- 
wise, and that the happy state is where every 
man may "sit under his own vine and fig tree, 
with no one to molest or make him afraid." 



CHAPTER V. 



MEANS AND INSTRUMENTS OF DISTRIBUTION — 
MONEY AND ITS FUNCTION. 

"The control of the nation's money is the shap- 
ing of her destiny." "With the same system of 
money, all nations will ultimately seek the same 
level." — Anon. 

In the primitive state of mankind the rude and 
limited productions of society were interchanged 
by means of barter or direct contact; and mer- 
chants were accustomed to meet at certain cen- 
trally located marts and there effect the exchange 
of their wares. While this mode of exchange was 
slow, we can at once perceive that the system 
could not have been much subject to what is now 
known as periodical crises, since there was no in- 
tervening factor, the derangement of which could 
prevent production and consumption meeting to- 
gether. 

For similar reasons we may know that rapid 
and excessive accumulation of fortunes into indi- 
vidual hands could not have so easily occurred. 
Fortunes accumulated and wealth concentrated, 
but more slowly and from causes other than those 
connected with the means and instruments of ex- 



THE NEW REPUBLIC. 67 

change found in use in the present times. Peo 
pie could not buy and sell and speculate, because 
there was no money, or representative of com- 
modities, to buy and sell with. Products had to 
be brought together and one given in exchange 
for another; and the process of getting products 
together was slow and tedious. 

In modern society exchanges are effected by 
means of media of exchange that make the trans- 
fer of commodities more rapid and at the same 
time more subject to speculation, and these media 
are of such a nature that they may be controlled 
by a class to the injury of the remainder of socie- 
ty, more so than it was possible to control the 
products of industry under the barter system. 
Hence the results of inequitable distribution as 
evidenced in civilized societies. These consider- 
ations force us to an investigation of the means 
and instruments of exchange or of distribution, 
with the hope of finding a solution of the great 
fundamental problem of political economy, and 
with the view of so adjusting those means and in- 
struments that the products of labor may be more 
justly and equitably distributed. 

Not ignoring collateral instrumentalities of ex- 
change, the slightest reflection must open our 
minds to the fact that all the major processes of 
distribution come within the scope, if not directly 
under the head of finance; which, being true, sug- 



68 THE NEW REPUBLIC. 

gests at once the absurdity of attempting to solve 
the basic problems of political economy, inde- 
pendently of a consideration of the science of 
money and art of financiering. Yet many of the 
most prominent writers on political economy have 
ignored the money question, among whom I men- 
tion Henry George, who, like others, seems to 
deal with the subject of money as a natural thing, 
like air and water, and which has no place in 
politico-economic writings. 

In commenting on the depressed condition of 
labor amid advancing wealth, in the introduction 
to his work, the writer of "Progress and Poverty" 
says, u there is distress alike in countries where 
gold or silver is the exclusive currency, and in 
countries where paper is money," making no dis- 
tinction as to the probable results of differently 
instituted systems of money, nor giving the sub- 
ject any great importance as an economic ques- 
tion. After the statement "in countries where 
paper is money," and after the statement in foot 
note on page 38, that "money represents wealth" 
(which is so universally an accepted definition), 
the author adds, in same note: "In speaking of 
money in this connection I am of course speaking 
of coin" (metal), "for, although paper money may 
periorm all the functions of coin, it is not wealth 
and can not therefore be capital. If money only 
"represents wealth" (which is correct), and if "pa- 



THE NEW REPUBLIC 69 

per money may perform all the functions of coin" 
(which I also admit), it is difficult for me to make 
the distinction that metal money z's, and that pa- 
per money is not, capital. The author of ( 'Prog- 
ress and Poverty" first here makes "two things 
equal to the same thing, and yet not equal to each 
other." 

The foregoing is about all the author of "Prog- 
ress and Poverty" has to say on the subject of 
money, which is one of the great defects of a work 
which in many respects is valuable. 

A maxim of far-reaching import is the one laid 
down by Sir Edward Gibbon, that "Iron and 
money are the two main instruments of civiliza- 
tion," that, "without the discovery of the one and 
the invention of the other, the present civilization 
would have been impossible." In this great truth 
there is food for reflection — "The discovery of the 
one and the invention of the other." Iron was 
discovered, money was invented, but money 
has been regarded, by political economists and 
the world at large, as a discovery rather than an 
invention; and, as it is inventions that are subject 
to progressive improvements, more so than dis- 
coveries, money, having been originally confined 
to discovered commodities, has been regarded in 
the light of a fixed quantity and its possible evo- 
lution into higher and more perfect systems has 
been ignored; and while, as Gibbon affirms again, 



70 THE NEW REPUBLIC. 

"the use of gold and silver as money is altogether 
factitious," the effect of the adoption of these 
metals as money has been adverse to the progress 
of financial science. And', the production of gold 
and silver having been limited in quantity, it has 
been a matter of common observation that people 
talk about money as they do about the weather. 
They do not seem to realize the powers of intelli- 
gence to change or improve the conditions in 
the financial world, but seem to rely more on 
the probabilities of nature. Legislators, even (in 
the supposed absence of dishonesty), find a great 
difficulty in eliminating the metal idea from their 
financial theorizing. 

If we would but reflect that money is an arti- 
ficial and not a natural thing, we would find our- 
selves more ready and willing to investigate its 
institution and more anxious to seek its adapta- 
tion to the wants of society. Those who control 
this agent of distribution are doubtless aware of 
its true nature, and hence manipulate it to their 
individual interests, to the injury of those less 
familiar with the subject. 

Conceding then that money is cau invention of 
man and that therefore it may be improved from 
less to more perfect systems, we may very proper- 
ly proceed to examine into its nature and function. 

The conditions calling for the need of money 
and its true function is clearly set forth in 



THE NEW REPUBLIC. 7 1 

the following extract from Aristotle's Ethics, writ- 
ten some twenty-two hundred years ago, and in 
that subdivision treating of justice and reciproca- 
tion in exchange. 

"It is therefore indispensible that all things 
which can be exchanged should be capable of com- 
parison, and for this purpose money has come in, 
and comes to be a kind of medium, for it measures 
all things and so likewise the excess and defect. 
For instance, how many shoes are equal to a house 

or a given quantity of food For unless the 

terms are somewhat equal there can not be ex- 
change The cause of exchange is de- 
mand for commodities, for if the parties were not 
in want at all, or not similarly of one another's 
wares, there would either not be any exchange, 
or at least not the same. And money has come 
to be, by general agreement, a representative of 
demand, and the account of its Greek name is this, 
that it is what it is not naturally, but by custom 
or law, and it rests with us to change its value 

or make it wholely useless And further, 

money is a kind of security to us in respect of ex- 
change at some future time (supposing that one 
wants nothing now, that we shall have it when we 
do,) the theory of money being that whenever one 
brings it one can receive commodities in exchange. 

So money, like a measure, making all 

things commensurable, equalizes them as near as 
may be." 



72 THE NEW REPUBLIC. 

The transition, from the state of barter to that 
calling for the institution of money, was charac- 
terized by the invention of tokens of value, which 
was a mongrel (half horse and half man, because 
part barbarous and part civilized) institution. It 
was wealth, in one sense, and only a representa- 
tive of wealth, in another sense. It was money 
in one sense and yet not completely money either. 
It was money among people by common consent, 
but not money in a legal sense, because made by 
expert and not by the fiat of any political power. 
It was made of some valuable or universally- 
sought-for product, such as gold or silver, and 
passed for whatever could be procured for it, ac- 
cording to its weight and the value of the mate- 
rial composing it, and according to the inclination 
of the parties concerned, much the same as money 
now is exchanged for products of labor and com- 
modities generally. 

Next in history comes the institution of money 
by government authority, and very naturally, bor- 
rowing from the past, improving upon the past, 
the metals came first into use as money. And 
having arrived now at the point of departure, 
where the sanction of government becomes neces- 
sary in the institution of money, or where money 
becomes a "creation of law," let us see how gov- 
ernment creates money, what process is gone 
through with in its institution. And, beginning 



THE NEW REPUBLIC. 73 

with the beginning of government, we may trace 
it in its institution in the United States for the 
present purpose of illustration. 

On the adoption of the constitution of the 
United States and the consolidation of the States 
into a government, our legislators, after some ex- 
perimenting in borrowing that which they had 
the right and the power to create and which it 
was their duty to create, concluded that the 
United States was a government, the same as that 
of England, France or Russia, and proceeded to 
attend to the financial affairs of the people under 
the act of 1792, which reads about as follows, on 
this subject: "The money of the United States 
shall be expressed in dollars, or units; dimes, or 
tenths of units; cents, or hundredths of units; and 
mills, or thousandths of units; and all business 
transactions of the government, and all proceed- 
ings in the courts shall conform to this regulation." 
Now in this there was only the establishment of 
a unit or standard of payments. We had money 
and we yet had no money. We had the idea, the 
real institution of money, but we had not yet 
chosen a carrier of the idea, the material on which 
the fractional parts of the law should be impressed 
and which should carry into execution the gov- 
ernment fiat. 

By going back to our schoolboy days we may 
find that we knew more about money than we 



74 THE NEW REPUBLIC. 

sometimes admit that we know now; for then 
when the question was put, "what is United 
States money?" we readily answered, "Ten mills 
make one cent, ten cents make one dime, ten 
dimes make one dollar," and, as some rules had 
it, "ten dollars make one eagle " This is all 
there was to United States money. It became at 
once evident however that the tangible thing, the 
unit in substance to carry the unit in law, was an 
indispensable condition, and hence the govern- 
ment selected, then and from time to time since, 
dtfferent carriers of the units; first silver and 
gold, then copper, nickle, alloy, and finally paper. 
In the case of the metals, the amount to be put 
into the coin was also a matter of legal choice, so 
that, so far in the process of institution, law or 
government fiat reigns supreme. 

But another step in institution must be taken 
before money is completely made, and that is a 
declaration with regard to the performance of 
function. It is not yet complete, with the metal, 
without the law. So, in the law creating each of 
the kinds of money, there was subjoined the 
clause, "and this shall be a legal-tender at its face 
value for" so or so much, according to the will of 
congress in each case — "legal-tender at face" and 
not at material, "value." 

By thus analyzing the institution of money we 
arrive at the conclusion, with Aristotle, that 



THE NEW REPUBLIC. 75 

"money is a creation of law." What are we to 
understand by face value? On the metal dollar 
we find, "United States of America One Dollar," 
and on the paper unit we read "United States will 
pay the bearer One Dollar. Now here is a dis- 
tinction without a difference that confuses some 
people. In coining the paper money the secre- 
tary of the treasury was authorized to "place up- 
on it what-ever inscriptions and devices he may 
deem proper," and, following the custom of the 
past in the issue of bank or private paper, he 
made the wording as we find it, as a matter of 
choice and not from the requirements of the case. 
It may just as well have been the same as the 
wording on the metal, which has also the defect 
of not stating the legal-tender clause in full, fo r 
on the back of the paper the true idea is perfected 
in an expression of the legal-tender function. 

It may appear to some, however, that there is a 
connection between the intrinsic and the legal 
idea in the promise to pay clause, and in the cur- 
rent notion of a supposed need of redemption. 

Let us examine this hypothesis. Were the 
wording different, people would think differently 
about it. The real legal status of the case, as we 
shall see, precludes, in fact, the idea of redemp- 
tion of the paper with the metal dollar. If the 
wording were promise to receive, the situation 
would be the same. The government pape 



j6 THE NEW REPUBLIC. 

money says promise to pay; but when, in one day 
or a thousand years? But on demand. I present 
a paper dollar for redemption and ask the govern- 
ment official for one dollar in United States money. 
The official asks, u what kind of a dollar"? A gold 
dollar will do. "But this bill does not promise 
gold." Well then a silver dollar will do. "It 
does not promise silver." What then does it 
promise I desire to know, when the official re- 
plies, "One Dollar," and, turning the other side 
of the bill, on which he finds, "this shall be a 
legal-tender at its face value," he passes it back 
to me, instructing me to go and procure any com- 
modity I may wish with it, the same as I ex- 
changed for it, thus getting back what I gave, an 
equitable redemption in exchange. 

OUANTATIVE CONSIDERATIONS. 

Money, from its having been confined to the 
metals and thus considered as a fixed product 
of nature, dependent upon accident rather than 
inventive regulation, its relative quantity has 
been looked on about as has been rainfall, in one 
sense; and, in another sense, it has been consid- 
ered as a regular and constant reward of industry. 
"If you have anything to sell you can get money," 
"there is as much money as there ever was I 
guess," "go to work and get money," are common 
sayings among the people. The error, in the en- 



THE NEW REPUBLIC. 77 

tire case, results from the original error that the 
source of money is nature rather than legislation. 
But having seen now that it is a creation of law, 
we should begin to reflect on its quantity relative 
to population and the conditions and demands of 
trade, the effect of quantity on general distribution. 
Some writers on the subject have seemed to 
understand clearly this quantative factor and im- 
portance, yet they have not always given a rem- 
edy for the fluctuations they deplored. They 
have however rendered a great service in the line 
of progress, since, by showing the necessities of 
the case, the remedy may be expected to follow. 

ESSENTIAL QUALITIES OF MONEY. 

The first thing in order, in formulating a plan 
or system of money, is to note the conditions to 
be fulfilled and the requisites and qualities seem- 
ingly necessary to be possessed by that which is 
to supply those conditions. 

The conditions in society calling for the use of 
money, as appearing to me, are an instrument, 
universally recognized and legally enforced, by 
means of which all products of labor and articles 
of commerce may be conveniently exchanged with- 
out loss, by which services can be discharged in 
universal "kind" (in something that procures any 
commodity desired), and a something by means of 
the existence of which credit is possible and con- 
tracts to be satisfied. 



78 THE NEW REPUBLIC. 

These are abstract qualities or conditions neces- 
sitating the creation of a unit of value or money; 
but there are special qualities that should be taken 
into consideration, more particularly connected 
with the material out of which money is made. 
These we shall proceed to discuss with a view to 
the comparative worth, as money, of metal and 
paper. 

i The substance of which money is made 
should be always obtainable at any time and in 
any quantity; otherwise, we may infer the possi- 
bility of all the direful consequences of its absence. 
If money is a thing of necessity at all, it is neces- 
sary in ratio quantities, or nnmber of units, as 
much so as is food for human sustenance or fuel 
and oil for driving machinery. Two men can 
not handle the same unit at the same time, no 
more than can two men eat and subsist on the 
same dinner, or two locomotives operate on the 
same fuel, or by dividing the fuel necessary for 
one. The metals have never been and never will 
be in all probability, so obtainable, while paper 
meets this requirement to a nicety. This rule is 
so patent that only its mere statement is necessary. 

2. And this first proposition being established, 
there follows naturally the second, that money 
should be made of the cheapest possible material, at 
least that part needed for government expenses. 
This from the fact that its purchase, or produc- 



THE NEW REPUBLIC. 79 

tion, is an item of great magnitude to the govern- 
ment creating it, and consequently to the people. 
To make money for government expenses of a 
substance, worth, in the markets of the world, as 
much intrinsically as its face value in law, is 
eqaul to not making it at all, or to borrowing and 
paying interest on it. The metals, gold and sil- 
ver are commodities possessing a value before 
made into money equal, or nearly so, to the pur- 
chasing power of the money into which they are 
coined, while, comparatively speaking, the cost of 
paper made into money is but a trifle, 

3. From the two foregoing we draw the third 
proposition, that money should be made in such a 
way and of such a material that it is not liable to 
monopolization. Any product of labor is liable to 
be monopolized, and a natural product limited in 
amount especially so. Gold and silver, before 
being made into money, are very liable to this 
defect, and, when converted into money, not only 
as much so, but are furthermore instruments by 
which all other products or forms of wealth may 
be monopolized, from the fact that money can not 
be made of anything else, supposing an exclusive 
metal currency. Paper money, when issued by 
the government and not therefore controlled by a 
class, is free from the evils and dangers of 
monopoly, that is, it is not liable to the control of 
a class in the matter of quantity to be issued and 



80 THE NEW REPUBLIC. 

kept in circulation. Even should a class aim to 
control trade by contracting the money accumu- 
lated by the money lending fraternity, the strin- 
gency may be relieved by an extra issue by the 
government through the channel of public ex- 
penditures, whether the government adopted a 
system of direct loans or otherwise. 

4. Money should be, fourthly, as nearly as 
possible, destructable without loss and replacable 
without cost, which is a proposition similar to our 
second. According to the best obtainable statis- 
tics, about one to one and a half per cent of all 
money is lost annually from wear and tear, abra- 
sion, hoarding, loss, and the various destructive 
processes of fire and water. In the case of the 
metals the loss from these causes falls on the gov- 
ernment, or the people, as well as on the individ- 
ual, while, in the case of paper, the loss falls only 
on the individual, and is a gain to the govern- 
ment of the entire amount, save cost of manufac- 
ture. By the use of paper the expenditures of 
government, wholely or in part, are saved, on the 
same principle that a machine is kept running by 
the use oi an inexpensive self-lubricator. 

5. Fifthly, money should be made of a mater- 
ial not required in the arts to the injury of the distri- 
butive processes of society. The metals are used in 
the arts very extensively, and to the extent which 
art draws on them, there remains a smaller over- 



THE NEW PEPUBLIC. 8 1 

plus for the purposes of money; and, since, as civ- 
ilization advances, more money is required, and 
more of the metals appropriated by, or sought for , 
in the arts, and since the supply of the metals 
must be and remain limited, we must draw the 
inevitable inference that the use of gold and sil- 
ver as money is incompatible with a progressive 
civilization. 

Some of the more minor qualities may be re- 
ferred to, such as portability and difficulty of imita- 
tion. While gold and silver are superior to iron 
or copper, in the matter of portability, paper 
possesses this quality to an infinite degree. The 
cost and danger and inconvenience of carrying the 
metals is more considerable than at first glance 
would be thought. But a few dollars is a burden 
to the individual when carried on the person, and 
to be transported otherwise is expensive. In the 
case of paper money we have not only the advan- 
tage of lightness, but the single coin may repre- 
sent the smallest fraction of a unit, or any num- 
ber of units desired, thus rendering the cost of 
carriage infinitely small and the convenience 
infinitely great. 

So far as the probabilities of imitation are con- 
cerned, there is not so much difference, yet the 
balance is in favor of paper. Silver has been 
counterfeited very extensively, in this country, 
gold considerably, the government perfected silk- 



82 THE NEW REPUBLIC, 

threaded paper very little The cost of machinery 
for the manufacture of the paper money, as now 
made, is so great, compared to the simple devices 
necessary to turn out a fair looking imitation of a 
silver dollar, that the probabilities of counterfeiting 
are with the metals. Two brick bats and a little 
ingenuity turns out good-looking half dollars, 
while the machinery necessary to manufacture 
of paper money, such as our government turns 
out as l 'legal-tenders, " would cost a fortune such 
as, if one possessed, he would have no occasion 
to engage in the business to say nothing of the 
certainty of being detected on account of the ex- 
tensiveness of the machinery and of getting to- 
gether the various materials necessary for the 
process. And a metropolitan paper has recently 
seated the case in propounding the conundrum, 
'Why is a greenback like a catapillar?" the 
answer to which is, ''because it is difficult to count 
her feet (counterfeit):" yet on a large scale the gov- 
ernment can coin paper cheaper than metal, in- 
fintely cheaper. 

The customs of the past fetter, in many ways, the 
possibilities of the present, and, since the metals 
have been used as money, through past ages, it 
has a hold upon the times, not only by virtue of 
the theories that have been promulgated from a 
false premiss, but also by virtue of the interests 
that are interwoven with the metal system. But 



THE NEW REPUBLIC. 83 

it's having been the theory of the past is, on that 
account alone, no more an evidence of it's trnth 
than was the ante-Copernican theory of astron- 
omy the correct one, and, as a broader view of the 
heavens has swnng the earth from it's supposed 
resting place, so will a deeper penetration into the 
science of money cut it loose in the future from 
the idea of metal basis. 



CHAPTER VI. 

MONEY AND iTS FUNCTIONS (CONTINUED) — SPECIE- 
BASIS SYSTFM — DEBT — BASIS SYSTEM — CREDIT- 
BASIS SYSTEM 

The development of the science of money, or 
the art of financiering, like civilization itself, has 
been a gradual and interrupted process. It has 
ebbed here and flowed there, according to circum- 
stances, yet, underneath, above and around the 
temporary fluctuations, the spirit of progress has 
asserted its iorce. And, what we may regard as 
one of the intermediate steps between the metal 



84 THE NEW REPUBLIC. 

and the paper systems, is the "specie-basis" sys- 
tem which has played so important a part in finan- 
cial revolutions and which yet dominates the 
realm of political economy, to the utter confusion of 
that science and to the detriment of an equitable 
distribution of the products of labor. 

This system of money grew out of a scarcity 
and need of money, on the one hand, and the op- 
portunities it offered to the spirit of speculation on 
the other. It starts out on the inconsistent and 
absurd pretention of issuing notes, by individuals 
or private institutions, with the promise to re- 
deem them in specie money, whenever presented, 
of course, when the lack of specie can be the only 
reason for putting out the notes. It has been 
called the convertable system, when really the in- 
ability of the issuer to convert is demonstrated by 
its institution. If a man issues a due bill payable 
on demand, he must possess the money at time of 
issue and be ready to redeem it at any time, and, 
this being the case, there is no reason for issuing 
the bill at all. 

This system really means that the issuer of 
notes puts out as many paper promises to pay dol- 
lars as possible, over one dollar of coin held in re- 
serve, and relies on his ability to prevent them 
from returning, for his profiits and the perpetuity 
of his institution. 



THE NEW REPUBLIC 85 

The paper so issued is not money, because is- 
sued by individuals, and, if issued by government 
and adhered to, is subject to the same objec- 
tions; for, while it may increase the volume of the 
circulating medium temporarily and thus give 
temporary activity to trade, it is nevertheless sub- 
ject to greater fluctuations than an exclusively 
metal system. Because a coin system is, in the 
first place, subjeet to the fluctuations of interna- 
tional balances, and, if paper is issued over coin, in 
excess of coin reserve and based on coin, a reduc- 
tion of one dollar of reserve makes a reduction of 
several times the amount of the paper. It has 
been very correctly compared to an inverted pyra- 
mid, the removal of a very few bricks from the 
base causes it to topple over. 

This system, with few legal guards and restric- 
tions, as in a wild-cat" days, runs about as follows: 
One man possesses one hundred dollars in gold 
coin, while three other men, owning property, are 
in need of money, each one hundred dollars. The 
first man makes the proposition to issue to each 
of the others one hundred due bills, agreeing to 
redeem them all on demand. The offer is accepted, 
in the absence of anything better, and the receiv- 
ers of the bills pay interest on them, while the is- 
suer keeps the hundred dollars in real money. 
The first man draws interest on his debts which 
he is unable to pay, or on a purely fictitious capi 



86 THE NEW REPUBLIC. 

tal, and the borrowers owe hini three hundred dol- 
lars in money, their obligations standing against 
them and the bills having passed into general cir- 
culation. One of two results must follow; either 
the bank must break from presentation of bills 
above amount of reserve, in which case the bank- 
er has collected interest on his obligations, only 
one-third of whtch he redeems, and holds obliga- 
tions for all bills lost; or the system must be con- 
tinued through credit, in which case the banker 
draws interest on his fictitious capital and an ad- 
ditional profit for the bills lost and destroyed 
which, in a given length of time, amounts to the 
original amount. Thus the system gives the 
money lender entire control over his fellows and 
could but result in the centralization of wealth 
into the hands of a money power. The banker 
can not loose in the operation, and an expression 
of an old Scotch banker, who had made his for- 
tune out of the old wild-cat system, is a patent 
truth, that "banks break but bankers never." 

DEBT-BASIS SYSTEM. 

Next akin to the specie-basis system is what I 
will call the debt-basis system, an illustration of 
which we have in the national banking institution 
of the United States, This system presumes to 
be specie-basis and, by virtue of the government 
force behind it, presents the features of an abso- 



THE NEW REPUBLIC. 87 

lutely convertable system, but an examination re- 
veals it to be only indirectly and remotely so. 
The first objectionable feature of this system is 
that it depends, for it's continued existence, on a 
perpetual bonded debt. The banker begins in 
this system with a bond or debt of the government, 
instead of gold or silver as in the specie-basis 
system. In fact when the system was instituted 
in this country there was no coin in the country, 
but in lieu of coin, the government paper known 
as the greenback, steps in as a basis and answers 
every purpose, notwithstanding the greenback is 
itself a debt representative, according to current 
notions. 

In this system, the government favors those 
who possess a given form of property, by issuing 
to them an amount of bills nearly equal to the 
face of their bonds or property, while they con- 
tinue to draw their regular interest on the origi- 
nal investment, and, in addition draw interest of 
course on the bills issued over their bonds. It 
may be further illustrated by the following. Ten 
citizens of a given community possess each ten 
thousand dollars. Five of them invest in govern- 
ment bonds, the other five in farms, both classes 
as a matter of choice of course. The profits of 
both classes, we will suppose, are equal, all things 
considered, and we must suppose this from the 
fact that investments are voluntary and inter- 



88 THE NEW REPUBLIC. 

changeable — each investing from choice in bonds 
or land and changing investment from the one to 
the other as he sees fit. The two classes are, at 
this point, on equal footing and neither has a 
right to complain, and should each be entitled 
to the same privileges and immunities. 

In the event of there being a deficiency of 
money in circulation and in case the government 
should decide to issue money in any form to its 
citizens as a loan over property as security, justice 
would say, treat all alike Rather would it seem 
a little the better policy to issue the money to the 
farmers, from the fact that they pay the taxes and 
are engaged in productive enterprise, and the 
further fact that the government bond, on the 
other hand, represents a condition of indebtedness 
that should be canceled as soon as possible, f and 
the bondholder has the privilege of converting 
his bond into money and money into land at his 
option.) But the government has so far seen fit 
to issue the notes to the bond-holder, while the 
wicket is closed against the farmer. And y< t it 
is the land-owners that want the money with 
which to keep the forces of production going, 
rather than the bond-holders who, if they wanted 
money, have but to call on the government for 
what it owes them. The only use the bond- 
holder has for money is to collect an additional 
interest on his capital from the farmer, from whom 



THE NEW REPUBLIC. 89 

he is certainly exacting usury under this system. 
The aim of legislation in this country since the 
inception of the national banking system, and as 
dictated by the creditor class, has been to get rid 
of all other forms of money in order to create a 
demand for bonds and to force the business public 
to borrow money from the ~~tional banker. On 
the simplest calculation we can see the motives 
behind the system, and, if carried out or extended, 
as is the aim so soon as circumstances will admit 
of, the entire country will be at the mercy of the 
banking fraternity and the eastern capitalist. 
And, while silver as money may not be as con- 
venient as government paper, nor as cheap a form 
of money for government expenditures, it would 
be a great help to the west if its coinage were 
free, and to the entire country, if all that could 
be coined might enter circulation and thus come 
in competition with the notes of the national 
bank; even though we adopt a paper unit, this 
should be permitted. It would wonderfully de- 
velop the silver-producing countries and make 
prosperous communities out of what now are dead 
and lethargic ones, and infuse life and energy into 
business over the entire nation. It is simply nom 
sense to talk about its parity with gold, for the 
reason that, as every sensible man knows, its 
monetization guarantees parity at once. All that 
is in circulation now is at par, and that is in 



90 THE NEW REPUBLIC 

the rocks only requires the government stamp. 

The only argument of the creditor class for the 
use of bank notes instead of government paper, is 
that bank notes are limited, in amount that can 
be issued, by the amount of the national debt, 
while the amount of paper issued by government 
would have no such guard against a superabund- 
ance. But, the same power that authorizes the 
issue of paper may also authorize an issue of 
bonds, and this has already been hinted at in Con- 
gress. Indeed the whole scheme of converting 
the greenbacks into bonds was not to guarantee 
specie payments and get rid of a redundancy of 
currency, but its object was to institute the na- 
tional banking system; for, be it remembered that 
national bank notes were never better than, but 
actually redeemable in, greenbacks, that the laws 
providing for the change authorized twenty per 
cent issue of national bank notes over and above 
the amount of greenbacks destroyed in lieu of 
bank issues, and that full monetization of the 
greenback brought it on a par with gold. 

If a condition of perpetual indebtedness and 
the issue and control of our paper money by a class 
constitute a desirable system of money, then it 
can only be said that it is fairly under way and 
may easily be extended. 

Taking into consideration the double interest 
the banker gets on his capital, and the power of 



THE NEW REPUBLIC 9 1 

the fraternity to contract and expand the volnine 
of money and to corner all that money represents, 
we need not wonder that farming does not pay, 

nor that government bonds u;e above par in the 
money markets of the world. Neither need it sur- 
prise us that the banking class are and have been 
crowding the retirement of greenbacks and the 
demonetization of silver, in order to create a de- 
mand for their notes. This system, the aim of 
which is to drive all opposition out of the market, 
is the most clearly for a class of anything hither- 
to attempted. 

CREDIT BASIS SYSTEM. 

Suppose now that the government, in the first 
place, desires to suppress this system, and to sup- 
ply the people with money, in the second place, 
based on the wealth of the country. She calls in 
the national bank notes and issues greenbacks, 
which are the same thing as the bond, so far as 
evidence of debt is concerned, (even though you 
call the greenback a debt) with the exception that 
one, the bond, bears interest and is never lost to 
the advantage of the government, while the other, 
greenbacks, bears no interest will never fully re- 
turn and answers the purpose of, and is, money. 
The national banker is paid the balance due on 
his bond and is at liberty to invest or use his 



92 THE NEW REPUBLIC. 

money as he chooses and in the manner he chooses. 
The government issnes money over land and the 
banker may invest in land if he wants. 

With this entire change of base for money 
supply, we arrive at a revolntion in financiering 
that at once decapitates the monster nsury and 
places the bond-holding and banking fraternity of 
the country where the slave-holder was placed on 
the emancipation of the slaves, with the exception 
that we do not rob him of his property, (as we 
propose to pay him for his bonds,) but only stop 
him from robbing the people. Instead of a sys- 
tem that has always given a class the control of 
the amount of money and the price charged for 
its use, a system is proposed that places amount 
of money and price for use in hands of and at the 
will of the people. With such a system, money 
will drift toward land, instead of toward debt, (the 
bond) and land will appreciate in price, as the 
bond has done heretofore, and to the general 
stimulus of industry and production. 

Under the bond national bank system, bonds 
are ranging way above par because of the double 
interest drawn on them and their exemption from 
taxation, while land is burdened with taxes and is 
less profitable than it should be. Shift the privi- 
lege from the bond to the land and a general 
stimulation to industry must follow. Then we 
would have a system decentralizing in it's tenden- 



THE NEW REPUBLIC. 93 

cies, because it would turn the current of enter- 
prise toward land the source of all wealth; where- 
as the bond bank system engages enterprise to- 
ward a bonded indebtedness. I have called it the 
credit basis S}^stem because, in it's adoption, the 
government utilizes its own credit for it's own 
benefit; and, the land constituting the govern- 
ment, it is simply mutual or self banking. It is 
a peoples currency. 

In the next place, it tends to prevent usury, 
bankruptcy and break-ups and land-grabbing by 
being an optional credit system. That is, the 
option is with the borrower, through his repre- 
sentatives in Congress, as to rate of interest to be 
charged (which would be very low,) and with 
each individual to hold it as long as he chooses, 
so long as interest is paid. If he is successful or 
fortunate in crops and health he may pass it back 
into the treasury, as all would do with money 
they could not use, rather than pay even a low 
rate of interest; if less successful he could hold 
it until fortune changed. Under all other sys- 
tems these options have been on the side of a 
money-lending class and oppression has thus been 
the lot of the masses through the ages. 

Following the foregoing idea is that of the sys- 
tem being naturally self-adjusting to the business 
wants of different sections. As conditions of sea- 
sons changed, so would the money flow in diff 



94 THE NEW REPUBLIC. 

erent directions, on the principle that "bodies 
move in the line of least resistance" or that 
"nature abhors a vacuum," and production and 
exchange would move, as near as might be pos- 
sible, with the precission of the circling orbs of 
the universe It could not expand to a redun- 
dancy, because money is never given away but 
only enters circulation for value received in labor 
or products. Its quantity could only be com- 
mensurate with production from this law. For we 
may remember that it matters not how much 
money there might be made by the government, 
or how many postage stamps, or how many rail- 
road tickets, the amount going out depends en- 
tirely on the use-wants of the people. 

Uniformity of values would result from this 
system, because prices fluctuate with fluctuation 
of money supply, and panics would be a. thing of 
the past. Supply would follow demand, and de- 
mand for money being subject to the calls of pro- 
duction, as the latter would be stimulated by the 
consumption demands of society generally, pro- 
duction and money supply would go hand in hand, 
and neither over-production nor depreciation of 
our money would be possible. 

Depreciation of money could not occur at home 
from another fact that the metals being demone- 
tized would in the first place fall in price, and in 
the second place the paper dollar, being the exclu- 



THE NEW REPUBLIC 95 

sive unit of value, would only be measured by it- 
self and would have nothing to depreciate from. 
It would not depreciate abroad from the facts 
that the foreigner passes it right back for our pro- 
ducts, and should it tend to depreciate, the per- 
centage of depreciation would act as a duty on 
imports, and thus "the hair of the dog would cure 
the bite." If our unit should tend to depreciate, in 
London, from the English standard, it would of 
course buy less goods there, and this would be 
the same thing as duty on said goods : they 
would cost more. And, as it is through coin- 
mere that our money gets into foreign countries, 
principally, our unit of value would simply have 
to stand alone and take care of itself. Its circu- 
lation in foreign countries would be governed by 
the laws of commerce, as would commerce be gov- 
erned by the laws of finance, as we shall farther 
see under head of commerce. 

Another advantage of the system that might 
have properly been mentioned when we were con- 
sidering the relative value and convenience of the 
metal and paper systems, is that the nation saves 
and absolutely stores up, in the thing itself, or 
its value in wealth, the entire amount of the met- 
als produced by our mines, which, under the metal 
system, is put to use as a circulating medium. 
To use the metals as money they are taken out of 
the market as commodities, and finally destroyed 



96 THE NEW REPUBLIC. 

in performing the money function. The individ- 
ual may procure as much, or even more, for them, 
but the nation uses them to oil the wheels of in- 
dustry, and thus looses what otherwise might be 
traded to good advantage for the wealth of other 
climes, that would go to make up our sum total of 
the comforts of life; that is, that portion of the 
metals that we did not want to appropriate in the 
arts ourselves. 

The adoption of such a system of money as 
herein advocated, would raise us to a higher plane 
of civilization, and, on the principle that the great- 
er attracts the less, or that the higher draws the 
lower, or that the superior inspires the imitation 
of the inferior, other nations would follow, in the 
march of progress, through the adoption of a sim- 
ilar system. Because, the stimulus given to our 
productive industries, by a system of money that 
guarantees a plentiful supply and a uniformity in 
the play of economic forces, would raise, gradual- 
ly and surely, our productions to higher forms, 
and we would sell that which cost little labor and 
buy that which cost more labor to produce. If a 
man can do well otherwise he will not do drudg- 
ery, and he always tries to get objectionable ktbor 
performed by some one below him in the scale of 
necessities. As we develop and become inde- 
pendent, we seek a higher field of labor, and, when, 
through an active condition of trade, employment 



THE NEW REPUBLIC. 97 

seeks labor, rather than labor seeking employ- 
ment, we may either expect the foreigner or the 
inventive genins by machinery "to do onr dirty 
work." The results will need but to be seen to 
be imitated and the perfected system of money 
may thus lead the nations on to a higher ideal of 
civilization. 

Supposing a sufficiency of money among the 
land-owning class, or that those who borrow will 
pass it back to the accummulation of the money 
in the treasury of the country, the equilibrium 
may be maintained by paying government ex- 
penditures therewith and the suspension of 
taxation. In fact the issuing of money for the 
defraying of government expenses is prop- 
erly a part of the general plan. The two plans 
or ways of issuing money, under the guidance of 
statesman-like management, would operate in a 
way to make each adjustable to the other and at 
the same time to preserve an equipoise of all the 
parts. There will always be public work to be 
done and always public expenditures necessary. 

The idea proposed by some of employing idle 
labor at a fixed rate of dai'y pay w ould do to some 
extent, but the basis of employment should be ju- 
dicious, necessary improvement, and not the 
clamor of labor or need of employment by labor. 
For, should the government fix a given rate and 
hold employment always ready, she would simply 



98 THE NEW REPUBLIC. 

open the door of money issue, not as dictated by 
the intelligence of congress, but to the clamor of 
the proletariat, who, from every quarter, would 
presume to dictate legislation prompted by their 
selfishness and ignorance. This would place leg- 
islation, to a great extent, at the disposal of, and 
dictated by the lower strata, and the proletariat 
would dictate the course of empire, as did the 
soldiery of ancient Rome. 

The issue of money, either to the land owners 
or for public improvements and expenses, is not 
to be governed by any arbitrary or fixed rule, but 
by the will of the people as the exigencies of the 
case may determine from time to time. And, as 
there can be no fixity in progressive democracy, 
the system proposed is the highest ideal of free 
institutions. 

In the evolution of financial ideas we have heard 
advanced also the per capita basis system. But 
it is an arbitrary system, and an unknown quan- 
tity, from the fact that, as population becomes 
more dense, and the elements of production more 
diversified, the amount necessary would vary from 
time to time, and such a system of issue could not 
be automatic and self-moving, and consequently 
not scientific. A system to be scientific must be 
so instituted that the flow of money must be in 
the line of least resistance where the productive 
demands of society may call it, guided at the same 



THE NEW REPUBLIC. 99 

time by the intelligent law-making power. It 
mnst correlate with production, for the most part, 
so that money out represents value in commodi- 
ties. Of course the want force of internal im- 
provements is a proper point of money issue so far 
as necessary for government expenditures. 

As Henry George has claimed that a sub-divis- 
ion of land into more numerous tenures would not 
help those who had no land, so a class of reason- 
ers may claim that, to issue money over land, 
would not benefit those who owned no land; but, 
as I have tried to show, that the more numerous 
the land-holders the more employment there 
would be for the landless, and the more general 
the prosperity, so it must be with a money sysem 
that gives the advantages of money issue to land- 
owners And it must be borne in mind that all 
real property holders should share the benefits of 
the proposed system. It cannot be helped that 
some have no property, and, whatever the system 
of money, those who have no security basis cannot 
borrow money. Artizans and laborers would profit 
indirectly, and they will be only too eager to deal 
with the more prosperous, and with those who 
will be more able to pay, and will consequently 
only too gladly ei dorse the system. Besides, all 
land-owners, if and when they need it, are to en- 
joy the benefits regardless of amount of property 
owned, proportional to amount of basis, while un- 



IOO THE NEW REPUBLIC. 

der the present system, only the comparatively 
rich can enjoy the privileges of the national bank- 
ing monopoly. Here alone is an argument suffi- 
cient to condemn the present system, and to give 
universal endorsement to the credit-basis system 
proposed. 

Another advantage of the new system is in the 
matter of taxation. Taxation is the one thing 
about government the most trying to the 
citizen, and it is the one thing that never has 
been adjusted on an equitable basis. Indeed, 
taxes have been so objectionable and burden- 
some that, when the amount necessary is con- 
siderable, the indirect mode has been adopted by 
governments, and, even in this form, it has been 
the occasion of more disputation than any other 
public question. The new system of money at 
once decapitates the monster of taxation by gov- 
ernment, and places this burden f which is not then 
a burden) on those who receive the advantages of 
money issue, and who pay it as a light interest on 
loans, and the poor man is thus again benefited in 
being relieved of a burden that has always op- 
pressed him. It may yet be objected (and new 
systems must answer all objections) that land or 
real estate owners would, under the plan proposed* 
borrow money from the government, at the rate 
asked, and turn around and loan it at a higher 
rate of interest to other members of the com- 



THE NEW REPUBUC IOI 

inunity, and thus speculate on the less fortunate 
class that own no real estate. Well, this can be 
done now, and the only difference would be that 
competition would guarantee better terms to said 
less fortunate individuals, and it would be only 
an inconsiderable number, as now, that would so 
borrow, and only as money would be called for in 
various fields of labor. Let it be so that a man 
can borrow of his neighbor. That the system 
would encourage wild speculation is an objection 
on a par with that offered against a free ballot, 
and the exercise of popular power in legislation 
generally. But, that all the people know how to 
conduct their financial affairs quite as well as a 
class can do it for them, is quite as plausable as it 
is for them to pay said class so dearly for the 
usurpation of this most important function of 
government. 

The selfish may object again that the system 
gives the man who is in debt an advantage over 
the one who needs not to borrow money. But 
why not allow your neighbor to borrow money on 
better terms if he can, and get out of debt sooner? 
Remember the first principles I have laid down — 
legislate for the weak, the unfortunate and less 
shrewd. 

Let the reader reflect that the change proposed 
is not so much of a change after all; that the land- 
owner (any real estate owner) can and does bor- 



102 THE NEW REPUBLIC. 

row money from the bank now whenever he wants 
it, provided he complies with the terms; that no 
man, under either system, will borrow money un- 
less he has use for it, and that, therefore, the extra 
inflation would only be the difference that the 
more favorable terms would make, and it could 
only be such as the business of the borrowers 
would justify. 

It may also be reflected that, if interest is lower 
and terms easier, the borrower would be propor- 
tionately less liable to loose his property, and that 
the people generally would be encouraged to se- 
cure homes. Especially will this be seen when, 
in connection with this system, we take into con- 
sideration a graded system of taxation that bears 
heavier on large estates, and therefore tends to 
encourage smallholdings, which will be discussed 
in another chapter. So I hope it will be seen, as 
herein claimed, that the great question of land 
monopoly, which has absorbed the attention of 
writers in all ages, and for which there has never 
been found a remedy, is solved only by the adop- 
tion of a system of money (the great instrument 
of exchange, and by which wealth is centered or 
disseminated) that is centrifugal in its tendencies. 



CHAPTER VII. 



MONEY AND IT'S FUNCTIONS — (CONTINUED.) 



Value of money — the automatic systems — value 
creation by law. 

In reasoning on the value of money, it is sel- 
dom that men take into consideration the range of 
prices of the various commodities that money rep- 
resents, as compared to money itself. They talk 
about the price of commodities in money, but 
seldom think about the price of money in com- 
modities, and, if prices go down, it is taken as an 
accident of trade that has no relation to the ques- 
tion of money, and while this is partially true in 
special instances, it is far from being true gener- 
ally — general prices being governed altogether by 
the volume of money. A changing volume of 
money has been the potent cause of the varying 
conditiocs of trade and civilization, producing ac- 
tivity or depression, according as money has been 
plenty or scarce, from time to time. When money 
is dear, as compared to commodities, or when 
money is scarce, depression follows, and when 



104 THE NEW REPUBLIC. 

money is cheap or plenty, we expect to see ac- 
tivity. And it matters not a particle what form of 
money is in use, the rule holds good. 

This was locally demonstrated in this country, 
when, during the civil war, the rapid increase in 
the amount of the circulating medium threw 
prices up at home, and again the rapid and great 
contraction of the volume, after the war, causing 
great depression of prices and stagnation of busi- 
ness. Of course, our greenback at the time, being 
only a partial legal tender, prices advanced out 'of 
all proportion with what the advance would have 
been had our money been fully monetized. There 
was not so much advance of prices the world over, 
although our metal money went abroad, for, as 
compared to the world's general fund, the increase 
was not so much, and the value of our metal 
money, and the issue of full legal tenders did not 
sink so much as compared to commodities. 

It is unnecessary to produce statistics from his- 
tory on the question of fluctuation of prices with 
changing money volume as it ought to appear self- 
demonstrating, by the simplest arithmetical rules 
and every-day observation; for, money, having to 
go between all business transactions, if there is 
not so much, it requires longer for it to get 
around, and, many transactions having therefore 
to wait, stagnation and lower prices must result, 



THE NEW REPUBLIC. 105 

while, if we rever the condition of money sup- 
ply, the reverse set jf f -cts must follow. 

It is affirmed 011 ^ood authority that the his- 
tory of the Roman empire was in accord with the 
position herein stated — that, during her splendor, 
she had a large volume of money, and, as she de- 
clined into the dark ages, her money volume and 
general prices declined, as a result of the failure 
of the mines of Greece and Spain, and as a cause 
of the decline of civilization (to which we will re- 
fer again). And again, when America was dis- 
covered, and quantities of the precious metals from 
Peru and Mexico began to flow into Europe, prices 
advanced and civilization took on new life. In the 
war with Napoleon, England expanded her paper 
money, and not only succeeded in the war, but 
enjoyed great prosperity, with good prices; but, 
when she resumed specie payments and con- 
tracted her paper money, prices went down and 
business languished. Men whose interest it is to 
control the money of the world, understand these 
rules of money supply, and are ever watchful 
against an increase of money. This class of men 
have always dominated governments, and, hence 
we need not be surprised that government paper 
issues have been discriminated against. Their 
watchful care is not only confined to paper issues 
by government, but they are often found arrayed 
against one of the metals, when they apprehend a 



106 THE NEW REPUBLIC. 

large supply. They induced some of the nations 
of Europe to demonetize gold, when, in 1849, there 
were reported mountains of that metal in Califor- 
nia and Australia, and, when this scare was over 
and another appeared on the discovery of great 
silver mines in Colorado and Nevada, they had 
the same nations to re-adopt the gold standard, 
and demonetize silver. 

The comparative value of different kinds of 
money is a subject worthy a brief notice. When 
paper money is demonetized, or partly so, it of 
course falls below the money possessing full legal 
powers, and, when the same thing happens to one 
of the metals, it becomes fully or partly a com- 
modity, and, declines from the metal that is fully 
honored with the money function. And, when 
things are so shaped, those who oppose an in- 
crease of money, are found attempting to shut out 
the dishonored metal, or demanding more bullion 
in the unit. While gold and silver have for ages 
ran at an even ratio comparatively, one to twelve 
or fifteen, the demonetization of one has always 
caused it to depreciate, from the one remaining as 
money, in the country especially where the dis- 
crimination is made. More particularly will this 
be observed if the dishonored metal is produced 
in great quantities in the country where dishon- 
ored, from the plain fact that it is there more con- 
veniently and cheaply produced and transported. 



THE NEW REPUBLIC. 107 

Thus, since the partial demonetization of silver 
in the United States, where so many mines are 
equipped for turning it out, the ratio has grown 
to one to twenty-two against the dishonored 
metal. The world over, however, this rapid and 
wide discrepancy does not exist, even allowing for 
cost of transportation to countries where silver is 
fully money, thus demonstrating that the ratio is 
to a great extent, governed by legal preferences 
and restrictions. 

In countries where silver is the exclusive legal 
tender, it will, when coined into money, procure 
more commodities than any other form of money, 
and, if demonetized and depreciated in the United 
States, the middle man in England, say, can and 
will procure his silver in America, and other com- 
modities where silver is wanted for money, and 
the American producer of other commodities suf- 
fers more than the American producer of silver, 
or, at any rate, as much. 

As long therefore as we recognize the metals as 
money, both should be equally and fully mone- 
tized. Should we adopt the exclusive paper stan- 
dard, a new set of conditions supervene. Money 
becomes automatic with demands of trade and 
more plentiful generally, and prices of commodi- 
ties better, first at home and secondly abroad. 
The metals may go to some extent, for a season, 
but, in the general round up, not so much for 



108 THE NEW REPUBLIC 

their demonetization lessens the demand for them 
or makes of them commodities. Silver went down 
when demonetized in this country, France accu- 
mulated the metals with a paper standard, and, in 
Venice when the metals were not money, their 
price was kept up only by a special law. If we 
have plenty of money and active business and 
production, we can buy all the metals we want, 
the same as we buy other commodities. If metals 
are demonetized here, they become cheaper, and 
therefore comparatively cheaper in other coun- 
tries, but, if both are equally monetized here, one 
will do practically about what the other will, the 
stock of money supply will be increased and prices 
so far revive. 

THE AUTOMATIC SYSTEM. 

The double standard metal system of money, 
when both metals have been admitted freely to 
the money current at a given ratio, has been 
called the automatic system, because it moved 
freely into circulation, according to the production 
of the metals, and because its production de- 
pended on labor-cost, and therefore entered circu- 
lation on a labor-cost basis, as supposed. Let us 
see how far these claims are true, and what an au- 
tomatic system of money is. Now, automatic 
means self-moving, or moving independently of 
will, and, in the question under consideration, to 



THE NEW REPUBLIC. 109 

be automatic, the system must be free at both 
euds of the process; that is, the supply should 
come proportional to the want force always and 
under all circumstances, according to cost of labor 
comparatively to the cost of labor in producing 
other things wanted by consumptive demands. 
In the first place, the production of the metals is 
not proportional to value of labor. Mine owners 
buy machinery and employ labor, paying accord- 
ing to supply and demand, and, in a short time 
become wealthy or otherwise. In one case they 
produce the metal at a light cost, in another at a 
greater. If mines were free and in all parts of 
the country, the metals would be produced at 
labor-cost, whatever that might be, but, as it is, 
they are produced under monopoly similar to com- 
moditities on which there is a patent protection. 
Wheat, corn, etc., are produced on a labor cost 
basis, but not so with the metals. 

Secondly, the metals are limited in quantity, 
while labor supply is unlimited. Both ends of 
the system are not equally free, from both of the 
foregoing reasons. 

Thirdly, the metals might become more scarce, 
or disappear entirely, while the need of money 
would be greater as population and business in- 
creases, which would make the system less auto- 
matic. Again, should the metals be found in 
mountain quantities, unless the volume of money 



IIO THE NEW REPUBLIC. 

was regulated by legislation, on the theory that 
money is an invention by and for society, there 
would be an inflation of prices out of all reasona- 
ble proportion. Money would continue to enter 
circulation so long as men could mould out, in a 
given number of hours work, enough to pay for 
more commodities than they could procure in other 
ways in the same length of time, until in the ab- 
sence of legislative restrictions, it might require a 
bushel of the metals to pay a week's board. Thus, 
we see that the notion that the volume of money 
should be regulated on the aforesaid metal-labor- 
production idea, aud that the metal system is an 
automatic system, is erroneous, and that some 
form of legal regulation is the true idea of money 
issue. True, a system of money to be scientific 
should and must be automatic, and it seems to me 
that the matter of interest charge by the govern- 
ment, on a free supply at a given rate, is the true 
rule of money supply, because it can be regulated 
independently of the accidents of nature. The 
dollar, or unit, in the first place is, and must be, 
the ideal go-between, and the number of these 
units is the only question to be solved, the same 
as the number of spades would be a matter of cal- 
culation for a given number of workmen, the dif 
ference being that the calculation en tools would 
be exact, while that for the flow of money would 



THE NEW PEPUBLIC. Ill 

be the use wants, so long as it paid to use the 
units. 

A day labor unit would not do, unless the day's 
work of every man was of the same value, as that 
value depends on various capacities, grades and 
necessities. But as an individual employs labor 
because he sees a profit, after paying for labor and 
interest on money, or, if cooperative, as the branch 
of industry grows or declines, as the case may be, 
the users of money would or would not borrow 
money, according to circumstances, and whatever 
rate of interest the government might charge 
would regulate, automatically, the volume of 
money in circulation from time to time. On this 
basis, both ends of the system are free to move in 
the line of least resistance, as explained in another 
chapter, the want end by the business and labor 
demands, the supply end under exhaustless source 
of supply, so long as the pay for use will justify 
the borrower in taking it. 

rule for the government of the flow of an 
automatic money system. 

The issue of money can not be on per capita 
basis, nor upon the basis of employment demand 
of the lower strata of society; but, to be governed 
by scientific principles, it must issue to the mid- 
dle classes, over property, to supply the want 
force, as determined by the spirit *of enterprise 



112 THE NEW REPUBLIC 

manifested in productive industry; governed by 
the intelligence of legislation as to interest charge. 
And it may be observed that this is the rule or 
law that governs money issue now, and under all 
systems; the differences, under plan proposed 
herein, being the source of issue from the govern- 
ment, rather than from a class, to the people; credit 
base, rather than metal or debt; interest at rate to 
defray expenses of the system, rather than a rate 
fixed by a privileged class; with uniformity in 
amount at option of borrowers, jather than at op- 
tion of lenders, and a paper rather than a metal 
unit. 

CREATION OF VALUE. 

An objection raised by the old school of think- 
ers to a government paper system has been that 
the " government cannot create a value," and, 
"as money is a thing of value, the government 
can not create money." It is as impossible to 
wean the Bourbons from this notion as it would 
be to convert a Calvinist to a more humane relig- 
ious sentiment. In an argument with a leading 
congressman yet in the lower house, he became 
very much vexed because I could not see this im- 
portant (?) truth. But false premises beget false 
reasoning. As it seems to me, it is only a gross 
misconception of the entire science of money that 
prompts the aforesaid hard money maxim. Money 



THE NEW REPUBLIC. 113 

being a tool of trade, a go-between or representative 
of values, it need not, and ought not to be a thing 
of value, but in performing the function of money, 
if a representative of value only, it always creates 
value for the government. It creates value by 
putting the forces of production at work, and, after 
performing its function, it being worn out and 
lost in time, the wealth it has created stands as a 
value created by money that has cost only a trifle 
to create, and that has disappeared, and therefore 
does not require redemption by the government. 
To illustrate by means of government public 
works, one way by which money is issued, sup- 
pose that the government pays out, by means of 
public improvements, an amount of money equal 
to the amount lost and worn out annually from 
the general loan fund. 

There will be thus created buildings and im- 
provements of various kinds (salaries and ex- 
penses of all kinds included of course), represent- 
ing money lost and used up. There will be a 
creation of value that can in no other way be cre- 
ated from next to nothing. The government has 
the buildings, the labor and material entering 
into their construction lias been compensated for, 
first with money, and secondly with the values 
that the money, in the hands of the laborers, has 
procured, the money has entered the general fund 
of circulation, and, from that general fund, a per- 



114 TH E N EW REPUBLIC. 

centage equal thereto has disappeared, never to 
call for value or redemption again. Under the 
metal system nothing of this kind can be done, 
and, from the metal standpoint of reasoning, of 
course the maxim that the government u can not 
create a value " holds good. 

But a sad argument for the metalist, that arises 
here, is the fact that, under the metal system, the 
government is continually losing a value that 
amounts to a serious burden to the people. The 
amount of government expenditures in time is 
enormous, and equals the nation's wealth over 
and over again, in the everlasting years, and not 
only must this amount be taken from the people, 
by some plan of taxation, but the amount lost and 
worn out must be made up by increased burdens. 
This manner of money supply, or the system 
where the government does not create money at 
all, is a question that swells into seriousness on 
reflection, and herein lies the problem of govern- 
ment perpetuit}^ and of civilization itself. 



CHAPTER VIII. 



MONEY AND ITS FUNCTION — (CONTINUED). 

The Failure of Paper Systems. 

There have been so many failures through his- 
tory, in experimenting with paper money, so 
many false and bogus systems, that most people, 
and even those whose position requires them to 
think upon the subject, are little inclined to favor 
its entire divorcement from the metal. Yet, when 
we reflect that metal systems have also failed, and 
that some paper systems have not failed, while 
others have failed simply because the powers that 
have dominated legislation have decreed they 
should fail, there is nothing more strange about 
the varying fortunes of paper than about the 
checkered career of metal. The metals and paper 
alike have been monetized here and there, now 
and then, through many national revolutions. All 
forms of paper money have done about what the 
creators of money have desired them to do. Money 
is something over which legislation has absolute 
control, and, aside from legislation, has no power 
whatever. Outside of this, the metals become 



Il6 THE NEW REPUBLIC. 

mere commodities, and are used and have powers 
just on a par with barter systems of half-civilized 
nations of antiquity, or when there was no money 
at all. 

The first important fact about the comparative 
powers of the metal and paper systems is that the 
metals have been the money of times of peace and 
quiet, and that, when it comes to the requirements 
of perilous times with a government, it has always 
been necessary to resort to the paper system. 
This is because the metal systems are controlled 
by individuals who own the metals, while the 
government paper systems are owned and con- 
trolled by the government and subject to legal 
regulations. 

Indeed, there is no such a thing as a govern- 
ment metal system. That is, the government 
has no control o! such a system, any further than 
to take it from the citizen for purposes of national 
outlay, which has proven itself to be so burden- 
some a system during great national calamities 
chat its abandonment becomes necessary. The 
paper system then takes the field and turn-; 
adversity into prosperity. The k( greenback " took 
our nation through the great War of the Re 
lion, when the metals vanished, and when nothing 
but paper money could have made that war a suc- 
cess, excepting, possibly, a system of bond 
indebtedness that would have entailed great and 



THE NEW REPUBLIC. 117 

lasting burdens on the people. And, notwith- 
standing the nature of the times, the issue ot full 
legal tenders was on a par with gold, and gold all 
out of the country. Those issues that were only 
partial legal tenders, or partially money, of course 
depreciated, because the men who made the laws 
and those who sought the great advantages to be 
reaped from the opportunities for gambling that a 
partial legal tender offered decreed the depiecia- 
tion. 

Our full legal tenders did not depreciate 
because fully monetized, and because their issue 
was not upon a contingency of national perpe- 
tuity, as was the case with the South. If the 
South succeeded, the North was yet a government 
to stand by her money, the same as though the 
dispute was settled as it was, while the case was 
different with the South, upon the success of 
whose undertaking in the establishment of a sep- 
arate government all her laws and obligations 
depended. Had the South issued legal tender 
paper money, it would of course have failed when 
the government failed, as will any government 
money, because a part of the government. Yet 
she had just as well have done it, and had she 
done it, and the North have adhered to a meal 
system, it would not be too much to say that the 
struggle may have ended differently. 



Il8 THE NEW REPUBLIC. 

The contraction of the. currency after the war, 
so strongly condemned by Peter Cooper and his 
coadjutors, was a move not of statesmanship, but 
of carelessness, haste and ignorance, or of inten- 
tional fraud. Had Congress but attached to the 
money then afloat the full legal powers of money, 
as she did to a part of it, and kept up an equal 
supply, the great work would have been accom- 
plished of guaranteeing prosperity and of averting 
the crash of business that attended the destruction 
of the circulating medium. 

Rome had a similar experience in the Punic 
wars, and England in the war with Napoleon. 
Napoleon was sent to St. Helena, and the people 
of England enjoyed prosperity through a system 
of paper money, but on its abandonment the 
greatest depression followed in times of peace. 

The republic of Venice prospered under a per- 
petual and exclusive paper system for six hundred 
years, or until Napoleon crushed the little re- 
public. 

In the war of 1870, between Germany and 
France, was a convincing experiment. Germany 
received a large indemnity of metal money from 
France and adhered to the restricted system, while 
France adopted the paper system, put her factories 
and furnaces and all productive enterprises to 
work, and in a short time had more of the metals 
than Germany. 



THE NEW REPUBLIC. 119 

France was blessed with prosperity, while Ger- 
many sent thousands of emigrants out of the 
country to find more promising fields of industry. 
France succeeded because she adopted a tool to 
work with, while Germany clung to the limited 
system aud failed comparatively. But the metal 
system fluctuates in a way that ought to teach us 
at a glance that quantity, and not kind, of money 
is the mainspring of civilization. At the birth of 
Christ the amount of money in circulation in 
Rome was $1,800,000,000.00; but the mines of 
Spain and Greece failed and the amount of money 
began to shrink, while the burdens of taxation by 
a corrupt line of rulers continued the same, and 
the dark ages supervened, and, at the final de- 
cline of the empire, a little before the discovery 
of America, the amount of money in the same 
provinces was about $200,000,000, or one-ninth of 
the amount about a thousand years previous. 

On the discovery of America and the produc- 
tion of great quantities of gold and silver from 
the mines of Peru and Mexico, its introduction 
into Europe gave new life and energy to mankind. 
Debts began to wear off, and gradually the dark 
ages disappeared, to be followed by the civilization 
of today. So that it appears the failure of money 
systems is a failure of money itself, or a failure in 
quantity, contraction causing depression, expan- 
sion prosperity. Of course, paper money fails 



120 THE NEW REPUBLIC. 

when improperly instituted, and that is truly pa- 
per money only which is issued as full legal ten- 
der and on the credit of the government, and, 
when the government fails, it fails, in which case 
we have no use for it. If a farmer quits farming, 
he needs no plows, but he would be foolish not to 
provide himself with plows in the contemplation 
that he might some day quit farming. 

The Continental scrip failed because the mu- 
nicipalities that issued it were merged into 
another and a single government, which repu- 
diated it ; but we do not contemplate repudiation, 
and, if we did, we would have gained all the 
advantages that would be gained by the use of a 
tool of trade so long as used. 



CHAPTER IX. 



Means of Distribution. — (Continued.) 
Commerce. 

Commerce is the interchange of commodities 
and products of labor between individuals and 
nations, and is one of the great elements of civili- 
zation. It results from diversity of soil and cli- 



THE NEW REPUBLIC. 121 

mate, diversity of tastes and customs, and from 
diversity in degree and character of contempora- 
neous civilizations. Commerce, being a great 
means for the distribution of wealth, plays an 
important part in the conduct of government, and 
deserves careful consideration in politico-economic 
literature. And be it remembered, as we proceed, 
that commerce is an element in distribution that 
concerns all the people, and that, it may be 
shapen so as to benefit all alike, or so that a 
class may be benefited the most, or, indeed, to the 
injury of some. 

The object of all commerce is to help produc- 
tion and consumption "meet and satisfy each 
other," and, therefore, to facilitate and lighten 
commerce is to promote the production, distribu- 
tion and accumulation of wealth. The natural 
desire of mankind to procure wealth, to gain intel- 
ligence and to satisfy curiosity gives birth to the 
spirit of commerce, and the spirit of commerce is 
one of the drive-wheels of civilization. It was the 
spirit of commerce that led Solomon to the projec- 
tion of his commercial policy when Palmyra and 
Baalbec sprang majestically from the desert, and 
that made them the great central marts of an 
illustrious civilization of antiquity ; that inspired 
Constantine to found Constantinople as the capi- 
tal of a new empire, where the riches of every 



122 THE NEW REPUBLIC. 

clime might find an easy entrance ; that prompted 
Columbus to the discovery of a new world. 

Commerce opens out the broadest facilities for 
progress and development, not only as pertains to 
physical well-being, but in every element of civili- 
zation. It gives freer scope to material produc- 
tion and a wider range for mental qualities, and 
opens opportunities for expansion in every partic- 
ular. It stimulates, then satisfies, curiosity, gives 
variety in knowledge of men and things, and puts 
in play the most powerful springs of human 
action. 

Rear a child among savages and it will be a 
savage, though taken in infancy from the most 
refined parents of a metropolitan community. 
Send a man into a desert or jungle, isolated from 
society, to rear a family, and, though he may sup- 
ply them with plentiful subsistence, and books as 
well, unless they come in contact with the world, 
they will never be really civilized. Cut a com- 
munity off from the main lines of travel for a few 
generations, and it will be ignorant and stupid, 
inversely proportional to opportunities and incli- 
nations for contact with tne outer world. 

Commerce is properly divided into two branches, 
domestic and foreign, to which I will briefly ask 
the attention of the reader, in the order named, 
and with the view of showing the importance of 



. THE NEW REPUBLIC 123 

the subject, as it pertains to the distribution of 
wealth. 

Domestic Commerce. 

Domestic commerce is the most important 
branch, because it embraces the major portion of 
wealth creation and commodity exchange. 

There has been, of late years, not only a great 
augmentation in the number and forms of prod- 
ucts of industry, but also a great increase in facil- 
ities of transfer, and, as these elements multiply 
and increase, there is naturally a proportional 
increase in wealth accumulation. 

Whether this wealth accumulation from rapid 
production and exchange tends to centralize or 
disseminate depends altogether upon the manner 
in which the instrumentalities are instituted and 
conducted, which may or may not be subject to 
legislative control. And whether these instru- 
mentalities should be, and how far, subject to 
legal regulations, must depend upon their scope, 
as affecting a less or a greater portion of the com- 
munity, and the extent to which it may be suffi- 
ciently regulated by competition ; for, on well 
recognized principles, the spirit of selfishness en- 
ters into all business enterprises. 

Where an enterprise conducted by an individ- 
ual or by a corporation concerns and affects a 
great number of citizens, the law, in many 



124 THE NEW REPUBLIC. 

instances, must regulate the management and 
restrict the profits of the owner or owners, in 
order that equity results ; and this legal or legis- 
lative control may be partial or complete, accord- 
ing to the requirements of the case. The com- 
munity may simply supervise to an extent, or it 
may assume the ownership. 

We see in our system of government now vari- 
ous degrees of legislative regulation. The com- 
munity governs, to some extent, various productive 
industries, and restricts the profits of the means 
of exchange, while it entirely o vns other means 
of distribution. It regulates the conduct of mines, 
to some extent, it restricts the profits of railroads, 
and it owns the mail department. 

If the industry or enterprise concerns the entire 
people, it is the proper subject of national legisla- 
tion and control; if it pertains to a part only, it 
comes more within the range of local or state reg- 
ulation. This line of reasoning carries us to the 
consideration of the advisability of nationalizing 
or communizing enterprises and industries, as may 
be neccessary for the proper distribution of wealth 
and for the protection of the interests of all the 
people; and, as I am considering in this chapter 
more particularly exchange or distribution, I shall 
confine my remarks now to the subject of transpor- 
tation, and there is no more fitting department for 
illustration than our railroad system. Our rail- 



THE NEW REPUBLIC. 1 25 

roads so generally affect all members of the com- 
munity or nation, that it is a serious question 
whether they should be nationalized, so that the 
cost of carriage and traffic may be reduced to the 
minimum, and equalized and differentiated, ac- 
cording to the circumstances of location and dis- 
tance from markets. Great advantages will be 
seen to attach to such a change on mere super- 
ficial examination, and, the further we penetrate 
into it, the more feasable it appears. 

Under government control, the cost for trans- 
portation of commodities over long routes could 
be reduced to the necessities of the case, while, 
on shorter hauls the difference could be compen- 
sated to the extent required by the general man- 
agement. The government conductes many mail 
routes at a loss, yet the communal system is 
inexpensive compared to what it would be under 
corporation or individual management; and a sys- 
tem of transportation which would bring the west- 
ern farmer and the eastern merchant in juxtaposi- 
tion is certainly not without advantages. Again, 
under this plan, government could regulate the 
wages of employees on a basis of equity, by rais- 
ing that of the pick and shovel above the margin 
of bare subsistance, and, under the leveling influ- 
ence of universal suffrage, congress would be 
compelled to make reasonable adjustments. Thus 



126 THE NEW REPUBLIC. 

there would be no more strikes and shut-offs to 
derange business and create confusion. 

If we reflect a moment we may perceive that 
the conversion of the present into the proposed 
system, as applied to all corporations, would create 
no jar or hindrance, nor require any extensive 
preparation. The government need but take up 
the stock or bonds of the corporation, at a price 
that the government has the right and the power 
to fix under the right of eminent domain, as a 
first step, the management going right on as now, 
and, as a second step, begin to regulate prices in 
traffic and wages, as is done in the post office de- 
partment, gradually eliminating and improving 
as requiiements might suggest. New lines of 
transportation would be projected, as the necessi- 
ties of different localities might require, all of 
which would be free from the influence of lobby 
and class dictation, comparatively speaking. The 
system through and through would be " of, by 
and for the people " — more than this democracy 
can not ask ; less savors of class and favoritism. 

Mr. George, in " Progress and Poverty," objects 
to all government control of industries, on the 
ground that it savors too much of paternalism, 
and dogmatically, and only dogmatically, asserts 
that, " whatever savors of regulation and restric- 
tion is in itself bad, and should not be resorted to 
if any other mode of accomplishing the same end 



THE NEW REPUBLIC. 127 

presents itself." This may be as well asserted of 
any government function whatever, and it may 
be remembered that government consists of " reg- 
ulation and restriction;" simply that and nothing 
more, as it seems to me. 

It may as well be objected that the post office 
department, the war and navy departments, etc., 
should be farmed out to corporations, on the 
ground that freedom is preferable to association. 

Why not a separate railroad department or in- 
dependent head, which may be as successfully 
conducted under government as under corpora- 
tion appointment, and which will possess the addi- 
tional advantage of being assisted by the advice 
and cooperation of the president, the cabinet, sen- 
ate and house of representatives? As departments 
of industry develop, and our government becomes 
more developed, does it not require that much 
more machinery to conduct it? And, because the 
machine is more extensive, will it not run just as 
smoothly with competent and more numerous 
guides? 

This fear of paternalism is but the sophistry of 
corporations, and we may expect them to oppose 
all interference with their prerogatives. 

It can not be objected that governmeut owner- 
ship would be a source of corruption. I think the 
reverse is true, for many corrupt schemes have 
been worked in connection with our railroads 



128 THE NEW REPUBLIC. 

under corporation management, while it is the ex- 
ception that corrupt practices occur in the post 
office department. There are no lobbies so effect- 
ive as those under the guidance of great corpora- 
tions. Corporations seud attorneys and agents 
to represent them in legislative bodies, but who 
ever heard of a legislator being elected by the in- 
fluence of one of the heads of the departments of 
government? 

International Commerce. 

Foreign or international commerce results from 
diversity in productions and tastes of different 
countries, and is as important a factor in the pro- 
duction and distribution of wealth as is domestic 
trade. It is governed by the same general prin- 
ciples and rules. 

The first law of international trade is that of 
mutual compensation in commodity exchange, or that 
imports must equal exports in value. One nation 
may export to another more than she imports 
therefrom, and import more from a third than she 
exports thereto, but, in the round of interchange, 
in totality, she must import equal to exports. This 
is not only a law of commerce, but a law of pro- 
duction itself, which may be illustrated in a very 
simple manner. An importer buys goods in Eu- 
rope, because he has a market for them to the job- 
ber or wholesale merchant; the wholesale mer- 



THE NEW PEPUBLIC. 1 29 

chant buys them, because he is selling to the re- 
tail dealer ; the retail dealer buys them, because 
he has customers for them ; and the customers 
purchase them, because they have money to buy 
them, in procuring which money they have per- 
formed labor which turned out at least an amount 
of products equal in value to the goods they buy. 
The same process goes on in all the countries 
trading together, and thus the processes must 
equal each other, and the law of trade is reci- 
procity. Of course, one individual may produce 
more tnan he buys, from the fact that his wages 
do not equal the product of his labor, but another 
will buy more than he produces, because he has 
speculated on his fellow's labor, and the sum of 
the two purchases will be the same as though each 
received in wages the exact equivalent of his 
labor's products. Therefore, the purchase of for 
eign goods can not exceed home production in 
the long run. 

One nation may, from temporary causes, pur- 
chase more than it sells, in which case it is said 
the balance of trade is against it (but really in 
favor of it since the man who is able to buy is 
better conditioned than the one who is compelled 
to sell), but in time the tide turns and things are 
equalized. This being the law of commerce, that 
we must buy if we would sell, it follows that 
where a nation produces a commodity, in excess 



130 THE NEW PEPUBLIC. 

of the consumption demands of its people, she may 
expect to dispose of it only by taking in exchange 
therefor, directly or indirectly, other commodities 
equal in value to the commodity sought to be ex- 
ported. If imports are hampered, exports will 
likewise be hampered, and, as imports advance in 
price, so will exports fall in price, thus taxing at 
both ends, that class of persons whose products 
seek, or the prices of which are controlled by, a 
foreign market. 

Of course, there are times in the development 
of a country when it has been deemed a wise pol- 
icy to place restrictions on certain varieties of im- 
ports in order to induce the importation of capital 
and build up home industries, but such a policy is 
wise only temporarily, and, when a condition of 
independence is reached, the continuation of the 
policy can be but suicidal; and suicidal because 
of the second laze of international trade is, that it 
stimulates enterprise and production. 

The force and power of production is determined 
by the possibilities of the consumption outlets, or 
by the " vis a frontce" (power in front) as it is 
called in the physical economy. " Nature abhors 
a vacuum," and "bodies move in the line of least 
resistance," we say in physics, and these maxims 
are equally applicable to the laws of 1 rade and the 
processes of production. Whenever and wherever 
production sees, or feels the force of an outlet, it 



THE NEW REPUBLIC. 131 

naturally moves in that direction, and it is this 
force that stimulates production and constitutes 
the spirit of enterprise. The broader the field of 
demand, of course, the more force given to pro- 
duction. Narrow the field, or cut off this power 
in front, and there will be observed a backward, 
choking process brought to bear on the line of 
supply, and that tends to cut off or check produc- 
tion. 

By permitting nature to take its course, com- 
merce will be as full as it is free, and the highest 
possible state of production will be reached, the 
most equitable distribution and the highest state 
of civilization attained. The development of com- 
mercial centers on lines of international trade 
may be evidenced as the creation of a surplus of 
wealth growing out of commercial relations. 
These marts could not develop but for interna- 
tional trade, and, in the absence of this trade, the 
larger cities would necessarily be the inland ones, 
and interchange, and consequently production, 
being less active, what would otherwise be flour- 
ishing cities would be but villages of fishermen. 
In the absence of commerce or international trade 
Palmyra of the dessert never would have been, 
and her piles of marble and pillars of granite, 
magnificent temples and stupenduous walls were 
but a commercial surplus growing out of the in- 
creased activity given to production by the com- 



132 THE NEW REPUBLIC. 

mercial spirit. So with all the principle cities of 
both ancient and modern times. 

Foreign commerce being, then, a great means 
of production and distribution, its intentional 
hampering, in the absence of temporary necessi- 
ties for stimulating a home commerce which is 
hampered by the foreign, is a policy o! either sel- 
fishness or ignorance, to say nothing of its ten- 
dency to centralize wealth into the hands of a few 
to the injury and penury of the many. 

Tariff Restrictions. 

Different nations, at different times, and for 
various ostensible purposes, have imposed a tax 
on imports, either with the view of raising funds 
to defray government expenses, or to increase the 
production and consumption of home products to 
the exclusion of the foreign; and, as we may view 
the subject now from an American standpoint, it 
seems that the tariff spirit grows out of the rela- 
tive difference between the producing classes in 
the different countries as to independence and 
prosperity. The American laborer, seeing the 
free interchange of products going on between 
this coumry and others, and the unrestricted flow 
of emigration, concludes that the time must come 
when his class of citizens must ultimately 
approach a lower level, and he thus thinks more 
about the danger of, going backward than about 



THE NEW REPUBUC. 1 33 

plans for a forward movement. He imagines he 
can elevate himself by fencing against the for- 
eigner, by refusing to buy from the foreigner, and 
consequently refusing to sell to him, yet he has so 
built the fence that the foreigner jumps over it 
through free immigration, if not indeed otherwise. 
It is the laborer whose case we are now consider- 
ing, and there is just one fundamental question to 
dispose of in this connection, and that is, does the 
laborer get more out of his labor by the imposi- 
tion of the tariff? 

Since the wages of the laborer constitute his 
only means of subsistence, the consideration with 
him is, how much wages and what can he procure 
with it? Then the object with him is to get all 
the wages he can and buy his goods as cheaply as 
he can; and, the tariff must raise wages more than 
it raises the price of products, or there is nothing 
gained for the laborer by the tariff. If it raises 
the price of goods in proportion to rise of wages, 
there can be nothing gained; if out of proportion 
above rise of wages, he loses ; for it is not so much 
the rate of wages, which may seduce and flat- 
ter before converted, as it is the amount of the 
comforts of life he may be able to procure there- 
with. 

As between countries similarly situated and 
conditioned, we can see that a tariff levied by all 
would even up all round, and be only a tax, and 



134 THE NEW REPUBLIC. 

this from any way of consideration, bnt we are 
examining the subject now as between an old and 
a new and developing country, and this must be 
borne in mind as we proceed. We start out then 
with a new country at a given stage and condition, 
with its natural resources, its given number of 
population, divided in a given way as to number 
of laborers and employers, and we want to con- 
sider the advisability of a tariff levy by govern- 
ment on imported goods. If we suppose a proba- 
ble immigration of both laborers and employers, 
we may expect the same conditions to be main- 
tained, in which case the tariff would do no good 
to either class — it would leave the same relative 
condition of things, except to raise the price on 
imported goods. If there should be more capital 
than laborers imported, it would be better for the 
laborers, if more laborers than capital, worse for 
the laborer, and this from the law of competition. 
But there would not be imported more capital than 
labor, while there would be imported more labor 
than capital; because, capital could procure labor 
cheaper in foreign countries, where labor is more 
plentiful, and because labor would seek the new 
country, where there are more natural opportuni- 
ties and fewer laborers. 

Now the seduction of tariff laws is the promise 
of higher wages, which induces immigration of 
laborers, and which, through competition, tends 



The new republic. 135 

to reduce wages. So in the matter of wages the 
laborer looses, or reaches ultimately a common 
level. How does it effect him in the matter of 
procuring subsistence with his wages ? It is uni- 
versally admitted that the tariff holds up prices, 
by preventing foreign products from being sold in 
competition with home products, only at a higher 
price. 

The laborer thus procures less with his wages 
and has less to procure with, and thus pays the 
fiddler for music that some one else dances after. 

Where labor is drifting into a new country, the 
employers of labor there, will naturally seek to 
keep out other employers or their products, by the 
law of competition, and this spirit of selfishness 
is the parent of tariffs instituted on the " protec- 
tive " basis; yet, while the tariff raises the price 
of the imported article, and gives the home manu- 
facturer an opportunity to advance his products, 
or to hold them up against the lowering tendency 
of improved machinery, it can not check importa- 
tion, any further than the system tends to check 
production, unless it absolutely prohibits. For, 
so long as a commodity manufactured in a foreign 
country realizes a margin it will be imported. 
That is, so long as it can be bought in a foreign 
market at a lower cost, counting tax and carriage, 
than the same article can be had at home. And 
the object of the tariff is not to prohibit. 



136 .THE NEW REPUBLIC. 

The only way possible, as it seems to me, to 
raise or hold up the laborer (reasoning independ- 
ently of the finance question), in a developing 
country is to let commerce take its course, and 
shut out the competing number of laborers — 
something like the relations existing between the 
United States and China — shut off immigration 
but continue to buy tea. 

The relation of labor to the question of tariff 
may be looked at differently from what it is from 
the tariff advocate standpoint, by comparing it to 
the position taken by the people of the Northern 
States of the United States in their trade with the 
South prior to the Rebellion. Cotton was then 
produced cheaply, because the labor producing it 
was slave labor, yet the North never thought of 
placing a tariff on the product True, we could 
not raise cotton in the North, nor levy a tariff on 
interstate commerce, but the one only thought 
was to free the slave and raise him to a higher 
plane, where he should more nearly receive the 
full reward of his labor. Taxing cotton could not 
have benefitted the negro, as all can see clearly, 
nor could it have benefited the labor of the North, 
for in that case w e should have continued to buy 
cotton from the South at a higher price. Neither 
would a tariff policy have made much difference to 
the Southern planter, who would simply have 
laughed at us for desiring to pay more for our cotton. 



THE NEW REPUBLIC. 1 37 

In that case we seemed to have taken the more 
reasonable position that the necessary relation of 
the labor of the world is such, by virtue of the in- 
exorable laws of production and commerce, that, 
to legislate for labor, we must legislate for labor; 
that we can not expect to raise ourselves by pull- 
ing down others, but that the better policy is to 
strike for the disenthralment of the world's mil- 
lions by a plan that will equalize the benefits of 
the inventive genius, and give to the laborer the 
full fruit of his toil. This seems to be the spirit, 
whether intelligent or instinctive, that inspires 
the various international labor unions. 

The laborer will not be sensibly benefited, how- 
ever, by tariff legislation; he may be to some ex- 
tent by immigration laws. His substantial bene- 
fits must come through the adjustment of home 
industries and home production to his benefit, and 
through a money system that will infuse life and 
energy into our industries. 



CHAPTER X, 



CORRELATION OF ECONOMIC FORCES. 

There is a correlation between money and com- 
merce that I think may be further illustrated ard 
cleared up. A man produces a commodity or 
thing of value first for his own consumption or 
use, and secondly, for exchanging it for other 
things he desires, or for that which will procure 
other things; and there is a difference between 
trading between individuals, between commodi- 
ties and between different countries that must be 
noted as we proceed. If a man takes for a com- 
modity the promise of an individual, he has really 
nothing until that promise is converted into a 
commodity he may take from the individual, or 
into the circulating medium of his conntry, paper 
or metal, which will procure other commodities. 
If he could not so convert his product, he would 
not produce it, and the facility with which it can 
be done determines the force exercised in produc- 
tion. And he can not accumulate wealth, either 
in money or things, only so far as he may have 
produced something given in return either from 
his land or labor. He trades with a community, 



THE NEW REPUBLIC. 1 39 

by bringing to the store butter, eggs, etc., and 
takes in return coffee, sugar, prints, etc. If he 
buys more than he sells, he goes in debt, and 
there must be a day of settlement; if he sells 
more than he buys, he simply stores up the pro- 
duct of his own labor and land. He can not get 
something without giving a return. So long and 
so far as he exchanges his products for money, it 
makes no difference what kind of money, so long 
as it is recognized by the community, and stands 
as the representative for anything he may want. 
He does not, however, want the money of any 
other country. We often hear people remark that 
they want a money that is good the world over, 
but there is no such money, and if they were 
offered for their products the money of any other 
country, they would refuse it. If we follow trade 
back or up from the mei chant to the importer, we 
arrive at international trade, and here similar 
rules govern the transactions as between individ- 
uals of the same community, excepting that each 
wants to get back to his own money as soon and 
as cheaply as possible, because with that he lives 
and moves. If he receives a money of intrinsic 
value, similar to that of the country with whose 
merchant he is trading, he has only exchanged 
commodity for commodity, value for value; if he 
receives paper money, it will procure commodities 
he may need from the country issuing it, but, if 



140 THE NEW REPUBLIC. 

too greatly and continuously in excess of those 
needs, it would proportionately depreciate, and he 
would curtail his sales to the merchant from 
whom he procured it, so far as necessary to dis- 
pose of the surplus paper, or to preserve a parity 
between the home and foreign money. If paper 
is given in exchange for foreign goods, we have so 
far given labor for commodities, because the paper 
represents labor performed, and we can do this 
only to a certain extent before it costs too much, 
and we begin to curtail purchases. For, as the 
money depreciates, we procure less for it abroad. 
So that, after all, this thing of international trade 
and circulation of money in foreign countries reg- 
ulates itself, although in a somewhat different 
manner from home trade and circulation. If, 
therefore, the reasoning in this and a former chap- 
ter be correct, the issue and flow of money must 
correspond with, and that it governs production; 
that production flows with the flow of money, and 
ebbs with money ebb; that commerce, domestic 
and foreign, is commensurate with production, in 
the same way, as inexorable law. 

Then, if the law of production is the law of 
money, and if the law of commerce is the law of 
production, it follows that the law of commerce is 
the law of money, since " things that are equal to 
the same thing are equal to each other." 



THE NEW REPUBLIC. 141 

This being the law, we should not fear that, in 
moving forward on one reform, we may come in 
collision with the other . 

We may pretty generally observe that, in the 
minds of people unfamiliar with economic subjects, 
there exists this superstitious fear or fogyish or 
faithless disposition. This disposition may remind 
us of the old come-off of the quack doctor, who 
had bungled the treatment of a case and lost the 
patient, "that the patient had two or three diseases, 
and medicines, calculated to cure one, operated 
against the other." We find men fearful of the 
adoption of a paper unit of value, on account only 
of an apprehension that, in some way, it would 
interfere injuriously with foreign trade, forgetful 
of the principle that, if we attend to our home 
affairs, the foreigner will likely do the same, and 
that commerce will adjust itself to the new con- 
ditions as a matter of necessity. 

On the other hand we find a class of tariff or 
trade reformers (?) who entirely ignore the money 
question, unmindful of the true law, in the econ- 
omics of society, that money first, production 
second and distribution and commerce afterwards ; 
or, in other words, that "money makes the mare 
go." 

Should we adopt a paper unit of value and 
should such a course cause a dumping of metal 
money onto the market of other nations, tempor- 



142 THE NEW REPUBLIC. 

arily or otherwise, we should remember that we 
get always value received for it in commodities of 
value, and that the gap thus created at home may 
and will be filled with the paper unit, which will 
keep the wheels and spindles turning. The influx 
of an extra amount yf money into other countries 
will stimulate production there, to the prosperity 
of the masses there, in spite of the reigning mon- 
archs of the gold and silver standards and in spite 
of the income class that fatten on the famine of 
the money market. They can scarcely demonet- 
ize both metals nor blind the people longer as to 
the cause of their misery and the remedy for it, 
and, as the greater attracts the less and as the 
higher draws the lower, we may expect, in our 
advance, to draw other nations after us in the 
march of progress. We advance, not on the 
principle of selfishness and competitive warfare, 
but on the broad Christian principle of charity 
and co-operation, to the reigning of justice and to 
universal freedom, when our country "shall be as 
a hiding place from the wind and a covert from 
the tempest, as rivers of water in a dry place, as 
the shadow of a great rock in a weary land." 



CHAPTER XI. 



POLITICAL ECONOMY — (CONTINUED). 



Collateral Economic Problems of Distribution — 
Taxation, Labor, Co-operation. 

TAXATION. 

Taxation has been, and remains, a great question 
of political economy that, within itself, may ask 
our attention; because, even with a just and 
scientific system of money and a free condition of 
trade, domestic taxation may be so adjusted as to 
tend on the one hand to centralization or on the 
other hand to equitable distribution of wealth. 
Taxes are paid as reluctantly as a doctor's bill, 
each seeming a burden outside of the regular run 
of business. They always seem a burden, and 
yet it is a maxim that "taxes and death are cer- 
tain". If taxes cannot be gotten rid of, it would 
at least be a relief to have them become uncertain. 
On an average the taxes on property consume it, 
or nearly so, during the lifetime of the property- 
owner, and thus, excepting the products of labor, 
the State takes finally everything, or, in other 
words, we pay a fine for owning property, as much 
so as if we lived on borrowed capital. So far as 



144 THE NEW REPUBLIC. 

this is necessary, we must say well and good, and 
I have pointed out, in that part of this work treat- 
ing on money, a plan that gets rid of national 
taxes. 

But, other sources of taxation are to be taken 
into account and they should be adjusted on the 
same principle of evening-up that characterizes 
the general spirit of this work. It seems to the 
author that the plan best to be adopted is one of 
exemption for the poor, and made cumulative on 
wealth as it centralized. Exempt the homestead 
to all alike, rich and poor, after which, place the 
minimum amount on the next additional amount 
equal to the homestead, and then on each additional 
similar amount let taxes increase, at a given ratio, 
as may seem necessary, from time to time, to pre- 
serve the equilibrium of distribution. The ten- 
dency of such a plan would be to encourage mod- 
erately small holdings and to discourage large 
ones. The spirit of grab would die, at a given 
point, without the necessity of an arbitrary rule 
which always seems undemocratic. It would 
operate on the same principle as the existing ex- 
emption laws, the protection of the weak against 
the strong. 

Even with such a system, together with our new 
money system, taxes would not be high on a 
reasonably liberal estate. 



THE NEW REPUBLIC. 145 

LABOR. 

"All men, being by natnre free and equal, owing 
nothing to each other, have no right to require 
anything from one another, only in as much as 
they return an equal value for it; or in as much 
as the balance of what is given is in equilibrium 
with what is returned , and it is this equality, this 
equilibrium, which is called justice, equity. Each 
is full proprietor of his body and of the produce 
of his labor." — Volney. 

"A fair division of the goods and rights of this 
world should be the object of those who conduct 
human affai r s. " — De Tocqueville. 

Writers on political economy, state. 1 men, politi- 
cians, moralists and demagogues have all had much 
to say about labor and its rights, but usually labor 
has had to look out for itself. 

Before the earliest time recorded labor must 
have been oppressed from the nature of the case, 
since it required labor to evolve from the state of 
primitive man. The universal observation of this 
fact, passed along the ages, through the mytho- 
logical maxim that "in the sweat of thy brow 
thou shalt eat bread," has fastened upon the 
minds of mankind the notion that drudgery is the 
fixed quantity of a fatal necessity, that can not be 
eliminated by the most progressed inventive 
genius; and, though we move on further away 
from primitive conditions, where each was com- 
pelled, with the rudest means, to produce his own 



146 THE NEW REPUBLIC. 

subsistence, towards the higher state where pro- 
duction goes on in infinite variety, by the mere 
touch of a spring or lever, labor has been and is yet 
told, by Seneca, to "thank the God's for polenta 
and water," by Malthus, that ' nature's table is 
overcrowded,' and, by modern pulpit orators that 
11 bread and water" is the only necessary dainty 
dessert-dish of a civilization evolved from Deity. 

Out of this notion of fatal necessity has sprung 
its twin genius, the "dignity of labor," that pre- 
sents the sublime absurdity of prefixing to the 
Adamic curse, the title " honorable." These twin 
genii of superstition and cupidity have been 
thrown as dirt into the eyes of labor, to its subju- 
gation, through all the ages, and yet stalk forth, 
with few to make them afraid. 

But, going now from the field of superstition to 
the more congenial realm of common sense, let 
us look at the question of labor from the stand- 
point of the latter. The cardinal law of labor is 
that mankind will strive to get along with as lit- 
tle labor as possible. Subsistence with the least 
possible exertion is the natural law of our being, 
and the object of all invention is to lighten labor. 
The inventive genius is in reality the child of the 
aforesaid law. The Garden of Eden is looked 
back to as a paradise of delights, because, there, 
no labor was necessary; and, looking now to the 
future, to find that oasis of rest, we love to think, 



THF NEW REPUBLIC. 147 

as we sing, that " every day'l be Sunday by and 
bye." 

We know that invention has made it possible, 
in many departments of production, for a few 
hours of labor to produce an amount of w ealth 
sufficient to supply the wants of the laborer for 
many days, were the instruments used in produc- 
tion not monopolized by exploiters; and notwith- 
standing all that labor is doing for the idler, in 
giving three-fourths of its products for the privi- 
lege of working, none of the advantages of inven- 
tion are given to the bone and muscle of the 
world. Such are the conditions indeed that we 
find labor ignorantly combatting that spirit of in- 
vention that is striving to b'ess it. 

Cooperative production in manufacturing, and 
all departments of production where numerous 
employes are engaged under one head or manage- 
ment, to be conducted by the state, is the only 
rational solution of the labor problem, as it ap- 
pears to me, and would guarantee equitable distri- 
bution of labor's products Certainly it would be 
as easy of management as are our penal institu- 
tions, where we see its illustration in a form. It 
is altogether in accord with Jeffersoi ian princi- 
ples, by, of and for the people, as eontradistin- , 
guished from the Hamiltonian theory, by, of and 
for a class. It is decentralizing or centrifugal in 
its tendencies and carries each social atom toward 
a condition of independence. 



148 THE NEW REPUBLIC. 

Of course it must appear, to those who are at 
all familiar with economic subjects, that, with sys- 
tems of money, trade and taxation all made 
and carried on in the interest of the producing 
classes, labor must reap its share of the blessings 
flowing therefrom, as I have tried to illustrate, in 
former parts of this work; but there is a move- 
ment rampant in the land, and it is in accord with 
the general upheaving spirit of the times, that 
labor should be free, and that freedom does not 
mean that it should be merely 'independent 
enough to work or play at pleasure, with time for 
leisure, but that it should have the full fruit of its 
exercise in cooperation. If products were equita- 
bly distributed, the producers could take a lay off 
when there was a great surplus, and no one would 
suffer, or, on the other hand, continue operations 
to the accumulation of wealth by all. Hours of 
work could be reduced when all got ahead, or in- 
creased when mutually agreeable or necessary. 
So that, to some extent independent of exchange 
conditions, or whatever the condition of exchange, 
a cooperative system of production would, in a 
great degree, obviate or prevent the periodical 
conditions of stagnation known as hard times, 
while strikes and lockouts would be a thing of the 
past. 

We see the cooperative spirit making here and 
there an effort, sometimes successfully, sometimes 



THE NEW REPUBLIC. 1 49 

otherwise, to establish itself. That its first efforts 
in this direction may be ineffectual, ma}* be no 
surprise, since this is the order of progress gener- 
ally; but, that complete success of the cooperative 
movement will come in the near future, there can 
be no doubt; because it is the only possible fair 
system of production. 

When men of enterprise and genius are cut off 
from the millionaire possibilities of the capitalistic 
competative system of production, they will nat- 
urally turn their attention to another field and 
there will be no other field but the cooper- 
ative. Besides, the labor element, by gov- 
ernment aid through proper beaureaus, will be 
more independent and less subservient to the 
capitalistic class, and will move off in the cooper- 
ative line of its own accord. Capital being thus 
less exacting and labor more free, a compromise 
will be effected and both will grow into a fraternal 
relation of cooperative production. u The lion and 
lamb will then lay down together," but not with 
the lamb inside the lion. 



CONCLUSION. 



Order of Progress. 

Doubtless many who read this work will con- 
clude that the measures advocated are somewhat 
extreme, after all. So they are, and for very 
plausable reasons; because, in formulating a 
theory, the ultimatum must be planned. It will 
not do to state half the case, for then the reader 
could see but a part An architect draws the plan 
or model of the building, before erecting it, or be- 
fore even laying the groundwork, and, when he 
commences to raise the structure, or do the actual 
work, he commences at the foundation, or base, 
and adds piece at a time, until the structure is 
completed; and often, as the workmen proceed, 
many minor changes are necessary. 

Likewise, in practical statesmanship; it is not 
always possible to conform legislation to the exact 
model of the theoretical economist No foresight 
is quite equal to the retrospective, and, in prac- 
tical appVcation, many details must be varied 
from the original design. A writer can only lay 
down general principles, and the legislator must 
fill in the details ; and this rule applies however 
correct the principles may be. 



THE NEW REPUBLIC. I5I 

Besides, all questions of political economy, or, 
more properly speaking, questions pertaining to 
the art of government, are necessarily of a pro- 
gressive nature, and hence it is that no builder 
can attain perfection, however deliberately he may 
investigate and theorise. 

In the realm of finance, for instance, we have 
seen, in our brief history as a nation, an evolu- 
tionary process, not only astonishing, but, well 
calculated to cause the thinking mind to expect 
still further improvement, and to perceive the 
difficulty of one man formulating a perfect system. 
But, if the general plan seems feasible, the prac- 
tical statesman will proceed, cautiously, we may 
say, and move gradually toward the desired end. 
He may first clear the way by removing the na- 
tional banks and permit the government to issue 
the paper money in reasonable quantities, and pro- 
vide for free coinage of the metals for foreign ex- 
changes. Next, he may proceed to expand gov- 
ernment paper as a full legal-tender, and increase it 
through government expenditures, so long as on a 
par with the metals. Then, when it is ascer- 
tained that a great quantity of paper can be kept 
at par continuously, a great many superstitions 
will be removed. Finally, when it is observed 
that the metals are more plentiful than they were, 
before the increase of the paper, and we may 
ascertain that the paper will buy the metals, and 



I52 THE NEW REPUBLIC. 

that our increased productions, resulting from a 
plentiful supply of a tool to work with, will buy 
metals, provided the supply of the metals con- 
tinue, we will be in a position to see the practica- 
bility of an exclusive paper unit. If the metals 
should depreciate below the paper unit, by virtue 
of increased supply, we would either be forced to 
demonetize them, or enabled to see the superiority 
of paper, and use it from choice and in increased 
quantity, issued as loans at a low rate of interest, 
or otherwise. On the other hand, if the metals 
should disappear entirely, or their production 
cease, we would at once perceive the necessity of 
the paper unit, regardless of all questions of 
parity. 

Similar rules apply to the conduct of other de- 
partments of government, the details of which 
must be left to practical statesmanship and ex- 
perience. 

Lastly, the reader is cautioned against the 
sophistry of fixed income classes, the fogyism of 
the bourbons and exaggerations of political dema- 
gogues. 

Every argument, fallacious or otherwise, that 
shrewdness can invent, every means that can be 
commanded, will be adduced to defeat the mea- 
sures advocated in this work. Like every advance 
in science, like every religious reform, political 



THE NEW REPUBLIC. 1 53 

innovatious must encounter opposition only meas- 
ured by their importance. 

The battle to be fought, on the money question 
especially, will be smiliar to that over slavery, 
from the fact that the new system breaks the back 
of the money lender in this country and seriously 
cripples the same class in other countries. It (the 
new system) is the bugle sound to the funeral of 
the world's greatest tyrant and which leads the 
way to a perfected civilization. 



APPENDIX. 



The Law of Population — Malthusian Theory 
— Higher Law. 

The laws governing the ebb and flow of popula- 
tion have been the subject of as much speculation 
as perhaps anything pertaining to political econ- 
omy, but it would seem that many writers on the 
subject have been more disposed to harmonize 
existing conditions than to ascertain the true law 
— to make it appear that economic conditions de- 
pend upon population more than the reverse — and 
they lay down the proposition that the pauperism 
and misery found in the world results from a 
crowding of population, rather than from inequit- 
able economic conditions ; in other words, that 
the only remedy for existing evils is to be found 
in population adjustment. The Biblical injunc- 
tion, to "increase and multiply" has b~en a 
great stumbling block to the old school of writers 
upou this subject, who would presume to find in 
nature a tendency toward conditions that would 
render its violation necessary, as well as to those 
who, from other reasons than economic conditions, 
would not choose to follow it; but, Malthus, a 



THE NEW PEPUBLIC. 155 

century ago, formulated a theory burdened with 
the difficulty of a contradiction between nature 
and the Utterly interpreted divine injunction, 
quite positively. The Malthusian theory, in a 
nut-shell, is that population naturally tends to in- 
crease beyond the powers of nature to afford sub- 
sistance, and that the proper equilibrium is main- 
tained by what is called the preventive or pruden- 
tial and the positive checks — the former being all 
causes preventing propagation, the latter, causes 
that increase mortality rate. 

In this theory there are belli truth and false- 
hood. 

On the side of its support, it may be said, that 
the Biblical injunction was only intended to apply 
during the infancy of the race, or in newly-settled 
countries; that the rule holds good under certain 
economic conditions, and that it also tends to hold 
good in certain stages of race-development, and 
while the reproductive forces and animal propen- 
sities dominate over the more intellectual, social 
and aesthetic, whatever the economic condition. 

On the side of its denial, it may be said, that, if 
true, the divine injunction, is to be observed uni- 
versally, is contrary to nature, and therefore 
wrong ; that the operation of the law depends on 
eeonomic conditions, ai d that, whatever the eco- 
nomic conditions, the increase of population is 
governed, to a great extent, by art, and neither 



1 56 THE NEW REPUBLIC. 

by divine intention norbynatnre; the latter trnth 
entirely upsetting the more fundamental basis of 
the Malthus reasoning. 

I was, not many years since, walking the streets 
of a village in company with a public official, and, 
passing some nice yards, in which were some 
little flower beds, he remarked: "The time will 
come when the^e yards, even, will be crowded to 
the highest possible state of cultivation." I re- 
plied, u perhaps," but thought how unobservant 
of the real nature and progress of things! 

My friend had not reflected that as civilization 
Has hitherto advanced, and as now advancing, 
many who possess yards at all have them of con- 
tinually increasing dimensions, while others are 
deprived of all such conveniences; that, as the 
gulf widens between the rich and the poor, a part 
have uncultivated yards and parks, gardens and 
drives, while multitudes have no where to plant a 
flower. He had not reflected that no nation had 
ever perished for lack of ground on which its pop- 
ulation might have subsisted in plenty, under an 
equitable subdivision, and that many had gone 
down on account of the poverty and wretchedness 
of the masses, wherein broad fields lay unculti- 
vated. Nor had he any idea of such change of 
conditions that would make future history differ- 
ent from that of the past. The remark was the 
outgrowth of an impulse, the result of an admix- 



THE NEW REPUBLIC. 1 57 

ture in his mind of the Malthusian theory with 
the more humane elements of his nature. He 
had concluded that, in a few centuries, population 
would necessarily begin to crowd upon land, and 
felt that they ought to be provided for, even at the 
expense of my neighbor's flower beds. 

Many will be the revolutions before this con- 
dition supervenes. Indeed, it will never come, 
whatever may be the economic adjustments of the 
future. There will always be room for humanity, 
room for flower gardens, for public and private 
walks, and r< om ior happiness, when, and so long 
as our political institutions are guided by compe- 
tent and patriotic statesmen. 

For a complete and clearly-stated refutation of 
the Malthusian theor3 r , the reader is refeired to 
the treatment of the subject by Henry George, in 
his "Progress and Poverty." 

THE HIGHER LAW OF POPULATION. 

But while the preventive or prudential check to 
the increase of population is argued by Malthus 
from the standpoint of necessity, I propose to ex- 
pose the fallacy of his reasoning by showing that 
the exercise of this check is governed by a differ- 
ent law and one that harmonizes with the aspira T 
tions of a more highly developed humanity. 

Malthus' notion was that of a check prompted 
by the necessities of poverty, while 1 think it 



158 THE NEW REPUBLIC. 

demonstrable that choice and inclination are the 
governing factors in a more advanced civilization. 

In this, as in other departments, civilization 
consists in the taking advantage of natnre ; and, 
while existence need not be a struggle under 
proper social arrangements, and, while there may 
be room for all who come, there are practices and 
sentiments of society that conclusively teach us 
that, in the progress of humanity from the lower 
to the higher orders, population is more and more 
regulated on an intellectual rather than on an 
economic basis — that population becomes in a 
measure self-regulating, independently of the ques- 
tion of ability to support a progeny 

We are all familiar with the fact that poverty 
and ignorance combined furnish the more numer- 
ous offspring, and why should this be so if Mal- 
thus' position be correct? Especially in the matter 
of wealth possession the reverse rule ought to 
assert itself, but the rule, that poverty turns out 
more numerous offspring than riches, is so uni- 
versally recognized, that the maxim has grown 
out of it, "A fool for luck, but a poor man for 
children." 

It is true that the reasons and wherefores of 
this rule have been little commented upon. In 
fact, it is looked upon as a kind of myster}'. 

Any physician who has practiced his profession 
twenty years, cannot have failed to become famil- 



THE NEW REPUBLIC. 1 59 

iar with the practices and inclinations of people 
in connection with the subject under consider- 
ation. The injunction "increase and multiply" 
has not altogether lost its force with a class of 
religious people, but. religious precepts that con- 
traverene happiness and convenience, in a social 
state, have in this day of liberal interpretation, 
anything but a firm hold upon the popular mind; 
and the common observation is that, when man- 
kind arrives at a certain point in civilization, a 
prudential check asserts itself, quite different 
from the hypothesis of Malthus and more in accord 
with the harmonious play of nature. 

And I take the ground that this growing senti- 
ment, favorable to the voluntary regulation of 
offspring, is in keeping with a progressive im- 
provement in morals. In fact, the very basic 
idea underlying this sentiment are averse to the 
more animal free play of the passions and inter- 
sexual relations, and consequently on a moral 
plane above that inspired by a literal interpreta- 
tion of the Adamic injunction. 

True, it may appear, on superficial examination, 
that preventive knowledge encourages a freer ille- 
gal contact, but, even though we admit of improper 
relations, and extra nuptial irregularities, in some 
cases, I think the increased mental force of a 
higher order will prove a barrier, in the right di- 
rection, or compensate for what may be lost where 



160 THE NEW REPUBLIC. 

ignorance gives way to animal passion. For we 
observe that, it is the more ignorant who supply 
the illegitimate offspring. It is furthermore a 
matter of common observation, with the physi- 
cian, that, in the marriage relation, the desire, 
among women, to control or prevent offspring, is 
by no means an evidence of uncha^tity ; but, on 
the other hand, such women are among the most 
chaste, while a keen desire for offspring is fre- 
quently evidence of uncontrollable amitiveness. 

The organ of philoprogenitiveness is situated 
along by the side of that of amitiveness in the 
brain, and consequently the theory of prudential 
check, herein advanced, is naturally in keeping 
with the highest idea of morals. The foce of the 
argument, that population tends to regulate itself, 
in response to natural sentiments, as the race ad- 
vances to a higher plane, is seen in the relative 
increase of the white and colored population of 
this country during the last decade — the rate of 
increase of the colored race being greater than 
that of the white. 

The animal struggles for existence with all the 
passions in full play, while the civilized man re- 
strains, curbs and regulates the passions in con- 
formity to social aspirations, and a condition of 
happiness. And with this the exercise of the 
more exquisite passion becomes more refined. 

Even now we see advertised openly the u Mai- 



THE NEW REPUBLIC. l6l 

thusian cap," the u Malthusiau capsule, " "stem,' 1 
" suppository," etc., ostensibly for women too frail 
to bear offspring, but more truly for the more 
healthy who do uot want the care of children. 

This higher law of population is in keeping 
with the automatic play of nature and physical 
forces, causing population to adapt itself to the 
varying conditions of civilization, and rather than 
cease propagation by being crowded down and 
down in economic conditions, as Malthus reasons 
the case, to which condition he would have us look 
forward to, we should rather have humanity regu- 
late the production of the species while on the 
upward move. 

We who, therefore, put confidence in the higher 
law, look forward with no gloomy forebodings of 
a necessary condition of overcrowding and pauper- 
ism to the point of cannibalism, but, with faith in 
a more scientific solution of political economy, we 
believe the Garden of Eden — the culmination of 
civilization — is yet in the future and for the pos- 
sible attainment of posterity. 



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